[HN Gopher] Column - a chartered bank for developers ___________________________________________________________________ Column - a chartered bank for developers Author : whockey Score : 502 points Date : 2022-04-21 13:33 UTC (9 hours ago) (HTM) web link (column.com) (TXT) w3m dump (column.com) | hn_throwaway_99 wrote: | Congratulations on the launch! I wonder if this kind of business | model, where it looks like there is basically "one really rich | guy self-funding" for a couple of years, is going to be more | common. | | That is, just looking at the site, my guess is that building | everything from the ground up (core banking stack, acquiring the | chartered bank, then all the APIs and tech on top of that) must | have taken many years and many, many millions of dollars. And | kudos, because the first thing that struck out at me is the | documentation looks _excellent_. Overall, it looks like something | where the the team had all the luxury to "do things right from | the ground floor", instead of scrambling and making shortcuts | before their runway ran out. I just think it would have been very | hard to find a VC willing to be patient enough to wait that long | with no revenue or customer feedback ("where's your MVP???") | vasco wrote: | > must have taken many years and many, many millions of dollars | | I don't have any inside knowledge, and obviously you can burn | many millions even with a small team but: | | "We started building Column in 2019 and launched in 2022." [0] | | "We're only six engineers (seven if you count me...but I'm a | weekend code pusher)" [1] | | [0] https://column.com/company/ [1] | https://column.com/blog/hiring-at-column/ | hn_throwaway_99 wrote: | Yeah, agreed, it looks like they are very efficient. But I'm | very familiar with the Bank as a Service space, and your data | points very much prove my point: | | 1. The reason so many BaaS companies partner with existing | banks is because the process of getting a bank charter is | _incredibly_ time consuming and expensive. There are tons of | costs just in legal /compliance before you've even done | anything. I'm not 100% clear if Column bought an existing | chartered bank or got a new charter, but either route is | millions right off the get go. | | 2. As you point out, they were at 3 years from founding to | launch. That's an eternity in the VC-funded startup world. | Most startups have an initial MVP in a ~6 month time frame. | abirch wrote: | I think many starts ups are "rich people" self funding (or are | parental funded). For instance Microsoft and Bill Gate's and | Paul Allen's helped them out a lot. Ditto with Mark Zuckerberg, | Elon Musk's Tesla & Space X, Warren Buffett's Berkshire | Hathaway. You'll notice everyone aforementioned attended an Ivy | League university. | WJW wrote: | At the very least Berkshire Hathaway is an odd example to be | pointing out as a "self funded startup". Warren Buffett was | an apprentice under Benjamin Graham for several years, | operated several businesses beforehand to make his first | millions and acquired the (heavily failing at the time) | textile operations of Berkshire Hathaway around 1962, when | Berkshire was already over a hundred years old. | informalo wrote: | Cool! Now do it again, but for Europe. | NetOpWibby wrote: | Will this service allow me to replace Stripe? | ayksee wrote: | Congratulations! Really excited and happy to see this come to | fruition. | _benj wrote: | This looks super interesting! | | Is use case only to build products on top of your platform or | could it be used for personal finances and, as a developer, add | automations and such over the API? | lifeisstillgood wrote: | Silly question - is there any way to offer a card payment from | Column, but restrict which outlets / shops can accept the | payment? | | (I have an idea in mind :-) | igorkraw wrote: | Nice job, are you available in europe? If not, do you know any | competitor doing something similar/when are you heading here? | venantius wrote: | We're rolling out something similar for the UK with | https://griffin.sh - aiming to get our bank license this year. | Then expanding to the rest of Europe :) | PStamatiou wrote: | Whoa this is awesome, congrats on launch. I was following along | with https://Increase.com which seems to be in the same realm | (former Stripe folks) | RobLach wrote: | This will be big. | tehlike wrote: | Seconding this. This looks fascinating. | whockey wrote: | Hey founder (and OP) here. This has been a labor of love for the | past few years and I'm super stoked on what we shipped. Would | love any and all feedback, thoughts and questions! | giorgioz wrote: | This looks like an awesome shiny tool but I'm not sure what I | could do with it! Some Use Cases of successful or hypothetical | customers using your product might help other understand how | they can use Column for their business. | | Is Column Use case to create cards/accounts for a business' | customers like Apple did with the Apple credit card? | | In my case, I'm the founder of https://www.waiterio.com which | is a B2B order management system for restaurants... can I use | Column to offer bank accounts and cards to restaurants owners? | Or restaurant diners? What are the winnings for me related to | revenues/branding/customers retention? | fierro wrote: | Yes, you can use Column to create and offer bank accounts as | well as build debit/credit/charge programs. There's a part of | the website that describes some common use cases | https://column.com/docs/guides/#use-cases | kolanos wrote: | Is there a way to invite other users to a developer account? Or | is it single user? | whockey wrote: | You can invite others to your team! | boredumb wrote: | Does this work in Puerto Rico? | thedangler wrote: | This is amazing. Good work! | leetrout wrote: | I have had this dream for YEARS. | | I wanted to make a community bank and then build the software | to run it and start selling to other credit unions / community | banks and start getting rid of the jack henry crap everywhere. | | Big congrats to you! | yowlingcat wrote: | Excited to kick the tires on this. Assuming it's correct to | think of Column as a very special BaaS vendor (which owns its | own bank and thus AVOIDS the double program manager problem), | how would you compare and contrast your your unique value prop | compared to other BaaS vendors like a Unit, Synapse, Treasury | Prime? | | Would it be fair to assume better economics because your supply | chain is more vertically integrated, or is there more to it | than that which I'm missing? | s_dev wrote: | How would you describe your business to a five year old? | [deleted] | ushakov wrote: | droobles wrote: | From what I gather this is the Tesla of banks (comparing new | kid on the block to the old guard - Tesla vs GM): meaning | it's a modern bank with systems that run on something newer | than COBOL with an open API. It's extremely cool and looks | like it may set the standard of what banks must be in the | future to compete with newer generations coming into the | market. | | EDIT: add " coming into the market" to the end | fierro wrote: | not a bad analogy! | jason0597 wrote: | That sounds very similar to what Starling Bank offers in | the UK, it doesn't sound that novel and new to me. | jeremyjh wrote: | I'm a little confused about who your customers are. | | Do I have this right? | | - Competent to develop and manage AML, KYC programs | | - Wants to handle underwriting, fraud, compliance & operational | risk exposure | | - Develops software | | - Doesn't want to talk to ACH & VISA | | - Operates only in the US | | Who is that? | devmor wrote: | This is my line of query as well. | | At this level of integration minutiae I don't see a the | benefit in not integrating directly with card issuers and | ACH. | mushufasa wrote: | I imagine these limitations are going to be a moving target | as they grow. | | A lot of developer driven organizations are very happy to | outsource complex parts of development to managed services so | they can focus on their core differentiators, especially when | it comes to parts of the stack that need super high | availability and security. This is why Auth0/Okta are big | businesses and not everyone rolls their own key cloak / | shibboleth instances, as one of many examples. | | This clearly seems like the Apex/Drivewealth model but for | challenger banks or new online banking operations. It is hard | to predict what startups or new projects will need this | because those platforms can unlock innovation for new | categories (e.g. no one imagined commission free trading in | 2008, and Robinhood wouldn't exist without Apex). | jeremyjh wrote: | I guess my point is that payment and ledger back-ends | aren't the hardest part about running a bank, they aren't | even the hardest technology component. This isn't "for | developers" in the same sense that Stripe is. It is for | people ready to run a bank. Sure it will save you paying | lawyers and regulators for charters and it will save you | from buying a mainframe to run some crufty COBOL ledger but | that still leaves a lot of yak shaving before you even get | to the interesting part of your Fintech product. | | Okta is successful because almost every application needs | authentication, almost every organization needs SSO, and no | one considers it a core competency. | | The intersection of organizations who can run a bank but | don't already have entrenched software to do so, and want | to build all the other software themselves seems | vanishingly small. | moooo99 wrote: | This seems to be the US equivalent to Solarisbank, which | operates only in some EU countries. I don't know any | specifics, but I have encountered Solaris a few times. For | example they are used by TradeRepublic, basically the German | Robinhood equivalent, and a handful of Neobank providers. | Those Neobanks usually focus onto a specific niche and build | their product based on the services offered by Solaris. | | I would imagine that Column could provide similar their | services to similar companies and make the development of | financial products significantly faster. | [deleted] | bpicolo wrote: | There are several industries where wire for million dollar+ | transactions are the norm. Seems like a real enabler in those | spaces? | edmcnulty101 wrote: | No questions. Just wanted to say I got chills when I looked at | this at how much potential it had. Very cool. | | also: The little column icon slide to the top right on login is | cool . | anonymouse008 wrote: | Seriously, I'm so happy someone has done this. I would love | it if the new saying was 'Column solves this' | frays wrote: | Would you consider Column a Neobank [0] or would this sit in a | different category? | | [0] https://en.wikipedia.org/wiki/Neobank | ur-whale wrote: | This looks like it's US only right now, is that correct? | | What are your plans to offer these services in other countries? | whockey wrote: | We plan on rolling out some corresponding banking services | this year to help people with multi-currency accounts and | international wires - but it would still be under our US | charter. No short term plans to go international - there's a | lot of ground we need to cover here. We tend to like to go | very deep in an area instead of getting to spread thin. | rawoke083600 wrote: | I can tell you MANY countries are NOT being served by | services like STRIPE (South Africa for example) ! I always | feel like there is a big opportunity bringing "these | financial startups" to where the major players are NOT. | | Congrats on releasing ! :) I would use it, if it was | available in South Africa :P | sofixa wrote: | Yeah, it's a tough spot. For the big players, there's | heavy investment to enter a new market due to local | regulations. A local startup could probably do it more | easily, but while they grow there's always the risk the | big players might decide they're a threat, they want that | market, and invest rapidly and dump the local startup. | thecosas wrote: | Looks like Paystack is available in South Africa and | might be worth checking out if you haven't already :-) | | https://paystack.com/za/pricing?localeUpdate=true | hn_throwaway_99 wrote: | I see you mention this in your docs, but do you provide any | tools for the compliance side that would be required to use | your API? E.g. if opening accounts on behalf of customers, all | of those customers need to go through KYC. Do you monitor | transactions for BSA/AML, or is that up to the user of the API? | | Thanks very much! | politician wrote: | Their docs lay out the list of regs: | https://column.com/docs/guides/bank-accounts#compliance-- | leg... | kolanos wrote: | As someone who knows what goes into something like this, this | is truly impressive work. Congrats on the launch. | politician wrote: | I don't see a link on your website to Column N.A.'s legal | disclosures. I'm trying to determine whether you have your own | direct connection to FedWire/FedACH, are going through a 3rd | party service provider like Fiserv/FIS, or are going through | another bank. | fierro wrote: | We connect directly to the Federal Reserve. No middleware | (i.e Fiserv/FIS), no other banks. | [deleted] | civilized wrote: | I'm excited about this because it may help with a problem I've | had for many years: in a word, being my family's CFO. | | I'm a data scientist, and I'd like to be able to report as | easily on my own personal finances as I can on the data of the | company I work for. This is not a small thing for me. I want to | take care of my family's finances, but I'm impatient with | bullshit. I don't want to spend an hour every weekend logging | into 10 different services, clicking on 10 different things in | each company's always-different, always-shitty web UI to pull | all the data I need. The easier and more convenient this is to | do, the better job I will do managing my money and protecting | my family. | | As a data scientist, I can handle writing a little code to make | some API calls and crunch the numbers that come back. If APIs | were available to me for all companies I have assets or | liabilities with, I'd have no trouble being an awesome family | CFO. But... there is nobody that wants to make this secure and | easy for me!! I would have to go to a company like Personal | Capital, give them ALL MY ACTUAL BANK LOGIN CREDENTIALS, and | they'll go login and do some screen-scraping to get the data. | Half the time that won't work because of 2FA complications. | They'll bring that data into their little ecosystem, serve it | through some shitty web interface, and use it to serve me | whatever ad nonsense they want. It's immensely unpleasant, | slow, unreliable, and insecure. It sucks ass. | | Is your company going to fix this, or perhaps be one part of | the solution? One day, will I be able to run my own R and | Python scripts that pull all my data, balance my checkbook | against receipt screenshots, automatic fraud detection, show me | how all my investments are doing? Maybe even open-source it so | that others can do the same? | | Thank you so much, in advance, for reading and any reply you | can make! I'm very excited for this! | GregorStocks wrote: | You might be interested in Tiller Money | https://www.tillerhq.com/. They provide something very much | along these lines, with the output being an auto-updating | Google Sheet that you can do whatever you like with. You do | still need to update credentials sometimes, but I've been | using it for a few years and it works quite well. | civilized wrote: | I've never heard of this! I've seen millions of ads over | the last few years, why haven't any of them been for this! | I will check it out, thank you! | lbotos wrote: | Do note that Tiller and Personal Capital both use(d?) the | same mechanism to scrape data: Yodlee | | https://www.yodlee.com/ | jawns wrote: | Column's website says the company is "100% founder and employee | owned." | | I'm curious about that ownership structure. I'm assuming you're | not organized as a worker cooperative, with a "one worker, one | vote" structure? Would you be willing to offer any details | about the ownership stake of the founders vs. the other | employees and what sort of decision making employees' ownership | stake entitles them to? | ramesh31 wrote: | Great stuff. Dealing with the insanity of legacy workarounds a | la Plaid has been a consistent nightmare for my company. | | >Would love any and all feedback, thoughts and questions! | | How about custodial accounts? | alberth wrote: | Looks fantastic and the onboarding is great. | | Can you talk a bit more about how KYC works at Column. | etchalon wrote: | Well this is fucking awesome. | manesioz wrote: | This looks incredible, congrats on the release. Does anyone know | if something similar exists in Canada? | mstibbard wrote: | Does anyone know what they used to produce their API | documentation? | whockey wrote: | We built everything in house! | mstibbard wrote: | It looks fantastic, as does the whole product. I've been | hoping for someone to make a good bank-in-a-box for a long | time. Good luck! | sp527 wrote: | There's something about this that smells like "anyone can now | operate a bank without a charter or being subjected to regulatory | oversight" that's maximally distressing and I think it's | incumbent upon the founders to clarify their intent. | | A proliferation of loosely regulated banking entities was the | basis for an economic disaster over a century ago in the US when | fractional reserve logic had yet to be formalized. I'm sure that | Column enforces reserve requirements, but this has the stench of | something that could enable some analogous calamity in the | financial (and therefore real) world. | | It was no less esteemed a figure than Galbraith himself who noted | that there's really no such thing as innovation in finance - it's | just people finding ways to run the same kinds of scams over and | over again. | | What's to stop someone from using this to create a 'virtual' | depository institution, issue bad loans against deposits that it | attracts with the promise of extraordinary interest, monetize the | loans for personal enrichment, and then crash and burn when the | aggregate default rate of the loan portfolio becomes | unsustainable, sticking the FDIC (and therefore taxpayers) with | the bill? And that's just one of many possible fraud scenarios. | | The answer is either "nothing" or that Column doesn't really | matter as a company because the theoretical customer base is | vanishingly small and it doesn't solve the truly important | problems in banking. | adamredwoods wrote: | If a developer writes a product that others use, I wonder what | type of legal fine print we need to include? | | For example, if I start my own micro-credit card using this | service, I may have my own legal t&a, but I wonder if I need to | include Column's as well? | boringg wrote: | Brilliant. Wish you the best of luck! | openthc wrote: | Will you bank businesses related to cannabis but that don't touch | cannabis? | | Also, your 'Verify' email still has a bunch of default template | text in it. | | ""This is preheader text. Some clients will show this text as a | preview."" | | -- Root/Entity & Beneficial Owner form has some ambigious error | messages; doesn't show where what is wrong (eg: which of the | three addresses was bad?) -- and the message disappears before it | can be acted on. | heassler wrote: | Looks amazing. Would love to have this in the UK. | creativenolo wrote: | Agree. But I wonder how much innovation a single company can | do. The digital innovation in the UK across banking is massive. | From what I see, light years ahead of the US. | igrav55 wrote: | Check out https://griffin.sh/ | venantius wrote: | Hi! Griffin co-founder and CEO here. Yes, we're building | exactly what Column is building but for the UK. Fun fact - | Column's CEO is even an investor in us! | whockey wrote: | Griffin is super rad! | blockwriter wrote: | I am not a professional developer, but I have been developing | little projects because I realized the importance, both | personally and professionally, of keeping up with new | technologies. I would be interested in setting up an account with | Column, if only to grow familiar with its advantages. I have been | working with Stripe to handle my business' e-commerce and in- | person payments. I am curious to know if there is an advantage to | using Column in conjunction with a service like Stripe. I know | Stripe does things like card issuing. What are the reasons, | either explicit or esoteric, for using Column's features rather | than a service like Stripe where those features overlap? | belfalas wrote: | Very cool! Is this powered by Marqeta under the hood? | whockey wrote: | Nope! We're a bank not an issuing processor (its pretty | confusing...), we don't wrap any vendors or 3rd parties. | However, they're an excellent issuing processor so a bunch of | our customers use them and us together. | tosh wrote: | What does "chartered" mean? | whockey wrote: | In the US (and most countries) in order to get access to the | central bank (in the US the fed) and do 'banking things' like | holding money, moving money, and lending money you have to have | a banking charter. We have a national charter (issued by the | OCC) but you can also have some other more bespoke charters as | well! | tome wrote: | So what's a non-chartered bank? | lachyg wrote: | I believe they're looking to imply here that they own their | own charter, rather than renting someone else's, which is | how almost all U.S. fintech companies operate (look in the | website footer of, say, Unit and you'll see: "Banking | services are provided by Unit's partner banks who are | Member FDIC.") | fierro wrote: | this is an important point. There are other providers who | offer programatic creation of bank accounts, payments, | etc. But all existing solutions wrap a bank, who then | wrap middleware providers and core systems. When you work | with Column, you're working with _only_ Column. This has | implications for cost (fewer people taking a slice of the | pie), performance /usability/experience (modern, tightly | integrated systems), and development velocity (fewer | players in the game of Telephone). Column collapses the | layers of the financial services stack and exposes this | functionality via API. | bogwog wrote: | I assume that means Column can offer lower costs, or | something? | phphphphp wrote: | I'm sure costs is part of the equation but I'd imagine | the control is far more important. Reselling legacy bank | services means you're limited to what they can do, which | is usually not much. Most finance technology is heavily | limited by what they can do... because of their partners, | and that's why they're usually just nicer interfaces to | the same old services. Hence banks like Monzo in the UK | building their own infrastructure from the ground up too. | The less you're dependent on legacy technology, the more | you can do. | molsongolden wrote: | Many neobanks/fintechs aren't chartered banks, they're | customer experience layers built on top of a partner bank's | infra. | procrastinatus wrote: | How does this compare with Stripe Treasury (banking as a | service)? https://stripe.com/treasury | _praf wrote: | Engineer at Column here! The difference between us and ALL | banking as a service companies (Stripe Treasury, Unit, etc) is | that we are the actual underlying bank in the transaction. BaaS | companies usually wrap one or several banks (like us) to | provide their API's. | u2077 wrote: | Could I create a bank account for personal use that has api | access? Or is the product only for businesses that issue | cards and accounts to others? | _praf wrote: | Yup. You can sign up today for sandbox access, and then | contact us once you are ready to go live and move real | money. | | Truth is, we probably aren't great as a personal checking | account, and thats not really the intended use case. But | you are welcome to try us out and see what you can build! | phonon wrote: | Looks awesome. Plan to support RTP? FedNow? | _praf wrote: | Stay tuned ;) | VincentEvans wrote: | Congrats on launching! | | I just want to vent about something bank-related, and hopefully | bait someone to tell me how this solves it. Or something else | solves it. | | Have you ever heard how you could pay off your mortgage a lot | quicker by making bi-weekly payments instead of monthly? Or how | you can include extra with your payment and instruct your bank to | apply it directly to the premium, helping you reduce your | interest? | | TLDR, I think people giving this advice haven't tried applying | it. | | Well, I wanted to do that - but in practice I found it near | impossible to accomplish. First - any form of electronic bill-pay | is right out of the window, because any extra payments or amount | - the bank will apply as pre-paying your next scheduled payment, | which means you are pre-paying not just principal, but the | interest as well. Why would anyone want to do that? The bank | helpfully told me that "some people maybe are going on vacation | and will be away when the bill is due". Yeah... | | You can try to submit a paper invoice with special instructions | by postal mail. Then it may or may not work. I don't know if it's | incompetence or outright customer-hostile behavior from the bank, | but this method succeeded only some of the time. You have to | follow up by phone to find out and even so making any corrections | after the fact is difficult and requires multiple call transfers | and waiting on hold. | kakuri wrote: | Sounds like you have had the misfortune of using terrible | banks. I have never had this issue with home mortgages or car | loans, it was always easy to make extra payments directly to | the principal. | jjeaff wrote: | I use a regional bank and they have always been a bit behind | when it comes to tech. But even a decade ago, I could make my | payment online and there was a simple checkbox to send extra | payments toward the principal. | not_math wrote: | At the bank I worked at, any payments made on the account that | were above the due payment were applied directly on the | account. But then you had people complain when they missed a | payment because they put more money in the account to not miss | the payment. You can't please everyone. | | Banking is hard because everyone is doing it differently, and | everyone is doing it. So you have to please older people that | are used to calling or speaking to a bank teller and also | please the younger generation who want to do everything online | and not deal with humans. | | The easiest way is to call when you want to do something the | system is not expecting, because we had to manually adjust the | final date of the loan, the amount due, and things like that. | Terrible system and way more highly susceptible to human errors | (trust me, I've seen a lot). | | There were also a lot of silos (different departments) to do | specific tasks, so you would get transferred a lot until | somebody knew exactly who could handle your case. Most people | were new recruits from University working part time, so they | didn't know enough to answer most questions and when they did | they usually had their degree so they switched jobs. | [deleted] | melony wrote: | Try this one | | https://news.ycombinator.com/item?id=30685921 | VincentEvans wrote: | Thank you for that! This seems to be exactly targeting the | problem i described! | giorgioz wrote: | An interesting thing I heard is that is not so convenient to | pay off the mortgage earlier. Mortgages are debt with 1-3% per | year. You could take the money you already have and put it in | an ETF covering the whole market which kept for a long time (10 | years) in average will return you 5-8% per year. I also had the | instinct of paying off the mortgage faster if I could until | they explained me that. Never had chance to do it. I'm | interested in hearing some expert opinion about it! | arcticbull wrote: | Or even throw it in a Series I risk-free savings bond paying | 8%. | | [edit] I'm not an expert but explained why I wouldn't do that | personally in a peer to your reply. | giorgioz wrote: | Your comment, though sarcastic, underlines some points I | thought about myself and I would like to discuss it! | | We are both well aware that there is no risk-free | investment. Governments bonds that are considered less | risky that ETFs usually return 1-2% per year. | | The ETF I'm talking about maps a market index covering a | big chunk of the US market or several stable international | markets. They are still a risk, your house is also an asset | and is also a risk. I think if you only have your mortgage | as an asset then probably buying some ETFs would help | diversify your assets. But if you already have a lot ETFs | then maybe would be better to finish up earlier the | mortgage... | arcticbull wrote: | Sorry if I came across that way, I wasn't being sarcastic | at all. Series I bonds are essentially risk-free unless | you think the US government plans to default within the | next 1 year (which is basically the lock-up period). | Series I bonds pay a coupon equal to CPI. The current | Series I interest rate is 7.11%. It is variable, however, | and capped at $10,000 in contributions per year (online). | [1] | | [1] https://www.treasurydirect.gov/indiv/products/prod_ib | onds_gl... | dragonwriter wrote: | > I think if you only have your mortgage as an asset | | Your mortgage is a liability, not an asset. | arcticbull wrote: | It really isn't if the interest rate is below inflation. | If it's below inflation, the mortgage is yielding real- | dollar value. That's an asset in my eyes. | | It's a calendar spread. Last year, you were buying 2021 | dollars for a fixed rate (2.675% APR in my case), but you | different vintage dollars over time. You owe 2022 dollars | in 2022, and 2031 dollars in 2031. A 2051 dollar is | almost certainly going to be worth significantly less | than a 2021 dollar. | | So you're buying 1 2021 vintage USD, but at the extreme, | you're paying it back with 2.2 2050 dollars. If we expect | inflation to be an average of say, 3% over that period, | each 2021 vintage USD should be worth at least 2.42 2021 | vintage dollars. So in this example, you're earning real | dollars over this period. | dragonwriter wrote: | > It really isn't if the coupon rate is below inflation | | It's a liability in the amount of the balance. I suppose | you could consider the present value of the "income" | stream of the difference between inflation and interest | over the life of the loan as an asset, but unless it's a | very unusual loan, any income stream of that kind is | likely to be a transitory effect, and interest is likely | to be be a real as well as nominal expense considered | over the life of the loan. | arcticbull wrote: | Indeed, you are of course correct! I'm just hoping folks | look at mortgages not as a strictly bad thing, but as a | tool in their financial arsenal. They can be good! I | think most folks are stuck in nominal dollar mode, and it | can really help to look at things in real dollar terms. | | I think I may have been loose with my words. | bombcar wrote: | It's a personal decision and can go either way, and depends | on your cash flow and risk tolerance, and goals. | | There are many ways to look at it, and the financial aspects | aren't always the most important ones. If you have higher | debt (credit card, etc) you probably want to pay those off | first. | | You may want to have ready cash available (stocks, ETFs, etc | can be sold) - but once you put money back into your mortgage | it can be hard to get it back out (HELOCs can affect this). | | You may find you're not good with savings, and paying extra | "forces" you to save (people do this with taxes all the time, | preferring to get a large refund as a "windfall" vs having | some amount of money extra each paycheck). | | And it can all change AGAIN from a cash flow perspective - if | you have a few years left on a ten year mortgage paying it | down faster gets you to the point where you have no mortgage | payment faster - that may not matter to you as much if you're | 29 years left on a 30 year mortgage. | | Also paying down debt is a certainty, but ETF returns could | do anything (we have had ten year periods of negative returns | in the past). Conversely, inflation makes your debt load | lesser, assuming your income inflates at some point. | tclancy wrote: | This got a lot harder with the rise of the Internet because | what was fairly well-known became completely well-known so | loaners started creating poison pill clauses to try to stop it. | And then once they moved to electronic billing a lot of them | came up with the hostile options you mention. The couple of | times I have refinanced mortgages, I explicitly checked this | when choosing between offers. | arcticbull wrote: | > Have you ever heard how you could pay off your mortgage a lot | quicker by making bi-weekly payments instead of monthly? Or how | you can include extra with your payment and instruct your bank | to apply it directly to the premium, helping you reduce your | interest? | | Generally speaking you don't want to do that. | | A mortgage with an interest rate of like 3% (to which anyone in | the last year refinanced or, or got on purchase - mine's | 2.675%) is well below inflation. This means that having the | loan is actually earning you money. When inflation is 8.5% and | you're paying 3% interest on that loan, you're actually making | 5.5% per annum by paying back the loan with future, inflated | dollars. | | That's before you factor in the mortgage interest tax | deduction, and opportunity cost. | | All in, not paying off your mortgage faster is likely earning | you 6-7% per annum _before_ you factor into account opportunity | cost. On a Series I savings bond, that opportunity cost is like | [edit] 7.11% [1]. | | Each time you pay into a Series I bond instead of paying off | your mortgage you're earning about 15% per annum on that money | vs paying off early. | | You want to keep your low-interest mortgage for as long as you | possibly can, deduct the interest, and set aside anything you | would have put towards early payments. If interest rates ever | drop below what you're paying, refinance. Don't pay it off | early unless your mortgage APR minus deductions is higher than | inflation. | | [1] | https://www.treasurydirect.gov/indiv/products/prod_ibonds_gl... | jjeaff wrote: | You have a rather sophisticated analysis here, yet, you left | out the most important factor: risk. Something that every | sophisticated investor must take into account. And in the | case of your personal residence, you have to take into | account not only investment risk, market risk and interest | rate risk (which you alluded to re: refinancing, but you left | out the fact that you are not guaranteed to be able to | refinance and even when you do, there are fees associated), | but you also have the risk of losing your home and being | homeless. For many people, the latter risk is assigned a very | high rate, so I don't think it is as simple (or complicated) | as you make it out to be. | vinceguidry wrote: | If they're banking cash they would have otherwise put into | their mortgage, then that extra liquidity is going to be a | good thing should it come to foreclosure. | skybrian wrote: | This is a form of leverage, but how do you use it in a low- | risk way? Fixed income investments seem to be near zero, and | maybe people don't want to invest more in stock. | | If the alternative is cash sitting in a bank account, paying | off the loan looks better. | | Edit: I looked at Series I, and it's variable rate with a | 3-month interest penalty for early withdrawal, so you're not | going to get 7% in the end. It seems worth doing a more | detailed calculation. | mjmahone17 wrote: | You don't want to do this now, but there's a reasonable world | we end up in where either inflation hovers at 1%, like most | the last 5 years (so you earn 2% by paying down a mortgage, | vs -1% when putting it into a savings account), or interest | rates stabilize at 10%, or both! | | Also some people just hate having debt, and so they want to | pay down debts as quickly as possible. Even if it's | "irrational" their goal is to pay down their mortgage in the | least amount of time. It is better for them to pay down | principal than enqueue future payments. | anonAndOn wrote: | Long term debt has a mental tax that does not show up in a | bank statement. While it may be "smart" to pay the minimum | amount on a subsidized student loan, there's nothing like | just paying it off and being done with it, forever. | VincentEvans wrote: | Answering both you and GP I belong to the "some people" | group you described in your post. It's not that I don't | understand the math, it's just that I don't have the mental | capacity and time in my life to take advantage of this | arbitrage. | | To illustrate - I have an acquaintance who transfers money | between credit cards to take advantage of points, and sign- | up offers etc. Were I to engage in such activity myself - | assuming I know anything about myself at all, it is that I | will 100% forget some detail or date and end up getting | charged all of the delayed interest making me worse off | than if I didn't engage in such a scheme at all. | | So it's like that. Rather than chasing some optimization in | a half-ass manner, I'd rather just pay off the debt and pay | less of my money to the bank. | sneak wrote: | There's no other thing to do, however, other than what | you're already doing with your otherwise unused savings | (hopefully index funds). Put your money in that instead | of paying the mortgage early, and you'll end up with more | money at the end of the mortgage. It's about the simplest | optimization possible. | arcticbull wrote: | The only optimization is don't pay off your mortgage | early. It's actually less complicated haha. | giorgioz wrote: | Can you name your bank please so to make it a negative review | on their bad business practises? | VincentEvans wrote: | It's a credit union called Trumark. | | On a related note - it appears to me that credit unions are | no longer what the conventional wisdom said they are either - | a small community and customer-minded institution. | | In practice - I frequently see them being bought up or | transferring management and resembling the national chains in | how they operate more and more. Not sure what the difference | is to be honest. | bombcar wrote: | Credit unions "legally" have to be owned by the customers, | but this doesn't guarantee they'll be any good. | | Many of them decided "going online" was too hard, and | outsourced all that stuff to providers. It can take some | research to find a good _local_ credit union that actually | works well, and sometimes you have to accept the way they | do things vs how you want to do things. | | Our local credit onion services AND holds 10 year | mortgages, everything else they resell and service for | awhile, but the servicing may get sold off, too. This can | mean that even if you find a perfect bank to borrow from | that changes shortly after you sign. | | Or you can switch some stuff to the massive brokerage | houses, which all have associated banks and pretty decent | staff/cost/features. | kemitche wrote: | I am able to add additional premium payments to my payment, or | as a separate payment, via my online mortgage payment site. | | It sounds like the bank/site your loan is under is actively | hostile towards such payments. I don't know enough about | mortgages to know how to help you solve your side, though. | lbotos wrote: | The most sad part is, while I'm not OP, I had a bank that | supported bi-weekly payments, my mortgage was sold, and the | new bank _doesn 't_. What a kick in the pants! | arcticbull wrote: | They're saving you money by not supporting bi-weekly | payments :) | lbotos wrote: | I assume you mean because the extra money that I'm | putting into my house could make more money in the market | so instead of a 13th payment, get gains in the market? | arcticbull wrote: | Well, as long as your (interest minus interest tax | credit) rate is below inflation, youre better off putting | that money in a 0% interest savings account than paying | down the debt faster. Or consider 7% from a Series I | bond, or investing it in something else. | VincentEvans wrote: | Yeah, that's the rub, isn't it. I would have asked the | person you are replying to "what is that fabled | institution?" (I still want to know though) - but the | problem is two-fold: first, it's not like I can just take | my mortgage with me and change banks, and second, the banks | seem to change hands, or they sell mortgages to other | banks. So even if you do your due-diligence, (which I did I | assure you, there was a reason I went with that bank, since | it had a relationship with my employer and offered | preferential rates), over last X years the bank went under | new management and situation changed dramatically :( | bombcar wrote: | It all depends on who services your mortgage. In my case, the | credit onion asked what to do with overpayments (because they | also asked if I wanted to round up the payment to make it a | whole dollar amount). | | Some banks aren't setup to handle this correctly, and do weird | things with a bimonthly payment. They get a payment on the 1st, | but it's not the full amount due, so they apply the _entire_ | payment to principle. Then they get another payment on the | 15th, and since it 's not the full amount due, they apply it to | principle _again_ , and then they complain that you didn't pay | your mortgage, you point out they're dumb, and they have | someone go torture the computer until the late fee is gone. | | And then this happens _every single time_ and so the bank gives | up and just applies all payments to "amounts due". | | Older banks are quite susceptible to this. You can solve this | because the "lot quicker" isn't really because of early | payments, it's because there are 12 months in a year but 26 | biweekly payments, which means you make a 13th mortgage | payment; so just do one principle payment or increase your | monthly payment by 10% or so. | hsuduebc2 wrote: | Word for this is based. | theptip wrote: | This looks interesting. Their "before" picture is a bit | misleading though; it's a worst-case. You can already get an | account with Silicon Valley Bank as a startup and originate ACH | directly over NACHA (source: I built this). | | However, providing an API abstraction over ACH is cool. I would | say it's worth paying a bit more to Stripe to not have to deal | with ACH directly, but then you add a payment hop between you and | your payees (==delay) so having a bank that offers a nice API | without adding a hop would be very useful. | | Note that "FBO" (for benefit of) bank accounts are actually quite | a valuable feature that is expensive to set up as a startup, and | let you execute some exotic legal/funds-flow structures. So | pretty cool that you can get those. | vfprp321 wrote: | This is a cool idea for sure...as a dev I'll definitely take a | look at the API docs. | | That said, are you a tad worried about the future of "fintech | apps"? It seems like a lot of the revenue growth in this space | was heavily related to ZIRP and/or super low rates in the | preceding few years, which made these apps more attractive to | consumers. So, is there an existential worry that the success of | the apps that will build on top of your bank is too closely tied | to potentially unrealistic Fed policy? | totoglazer wrote: | Could you share more on the legal entities that underlie Column? | In particular, what's actually chartered at OCC and a member of | FDIC? I can't find you, but maybe you just have a different name | (for now?) | zrail wrote: | This is awesome! | | Could you talk more about the monthly minimums? Also can I create | personal accounts with this or is it just business accounts? | RcouF1uZ4gsC wrote: | Very interesting. How are you dealing with KYC regulations? Do | you provide that, or is it the responsibility of developers | calling your API to have already done KYC. | whockey wrote: | We let developers bring their own KYC providers. There are so | many great solutions out there I don't think the world needs | another one :) | | In general our approach is to focus on building things that | 'only a bank can do' and if there are great existing solutions | (ie: fraud, kyc, issuing processors) we let developers bring | those solutions. We play nicely with all of them. | ValentineC wrote: | I had a quick look through your docs, and it would be really | great if Column allowed Entities to use identifiers other | than SSN: | | https://column.com/docs/api/#entity/object | koboll wrote: | Would be nice to have a side-by-side comparison with the steps | to starting and operating a bank to get a full picture of what | Column abstracts away and what founders must still DIY. | Currently you have to dig deep into the use case docs to | determine some of these details. | PeopleB4Cars wrote: | This but as a credit union | [deleted] | ncake wrote: | If this is a US-only service, it should say so on the website | somewhere. | | I've also had this experience with e.g. Betterment and | Wealthfront. The only way to find out they're US-only is halfway | through sign up process, not even anywhere in FAQ's. | taejavu wrote: | The first line under the main heading starts with "The only | nationally chartered bank...". That, combined with the dot com | domain, implies pretty heavily that it's a US only thing. At | least, it did for me. | toomuchtodo wrote: | Will you support FedNow instant payments when it GAs next year? | Alias support for transfers and payments? | | Also, my favorite part of your site is this part of your Careers | page: | | > I don't fit into any of these roles. | | > You get Column and you think you can drive value on day one. | We'll be honest the bar will be pretty high for us to hire | outside of these roles - but fuck it, surprise us. Give us a | compelling narrative and hustle....and we promise we'll read the | email! | | Very cool product, excited to see it grow. Def the future of | fintech. | _praf wrote: | Engineer at Column here. We absolutely want to be early | adopters of all new Fed technologies and payment rails. That | being said, the rollout on these things is...slow. The Fed | moves at its own pace, but we will definitely be right there | with them. | toomuchtodo wrote: | Thank you for the reply. One more question: is it possible to | sign up as an institutional investor to buy loans originated | on the platform alongside Column's buy side? | | https://column.com/loan-purchase | tristanMatthias wrote: | Im consistently disappointed with the state of banks in the US | (Aussie here). This looks amazing. | | Would it be possible for me to build something for personal use | on top of this? Or are you only targeting business at this stage? | DenseComet wrote: | Tacking onto this question, does anyone have recommendations | for US banks that have API access and allow personal use? | | I've come across a couple companies such as Mercury but they're | only for business use. | bogwog wrote: | I know Chase at least offers an OFX endpoint if you pay a | monthly fee (like ~$10/mo). I wrote a tool a while back that | would automatically use that to download my transaction data | and store it in a local format for personal accounting | purposes. It worked well, but I abandoned it out of laziness. | gtkspert wrote: | I've resorted to writing a service that can initiate | transfers and retrieve transactions for a smaller US bank. | | I really just want a bank account with an API, that would be | so, so nice. | joshstrange wrote: | That was the promise with Simple (which they promptly | abandoned), it's the main reason I signed up with them in | the first place. | | You can get away with something like Plaid if you just want | data but for actually making moves you'd need something | else. | crate_barre wrote: | Just to add to your point, can one run their own bank with | this? | systemvoltage wrote: | What are some of things you can build using Column? Ideas? | | Btw, amazing brand name. Column. | Asafp wrote: | I am one of the Engineers at Unit.co - we are also building a | platform that allows developers to embed financial features into | their product Congratulations on the launch! the market is huge | and competition is welcome :) Column took a very interesting | route, while we have Bank Partners that we develop with them, | Column is also the bank , curies to know why they decided to take | this route. | bogwog wrote: | This looks so damn interesting and cool, but I'm still trying to | wrap my head around the concept of a "bank for developers". I get | payment processors, like Stripe, but this is a level or two below | that, right? | _praf wrote: | Engineer at Column here! Exactly - we provide access to bare | metal banking. Think of us as the bottom layer of the financial | infrastructure stack. | durpkingOP wrote: | Do you plan on offering merchant accounts? (mids)? | kommstar wrote: | Where is the integration with the crypto networks? My crypto is | programmable and I would love to see my bank have an api as well. | whockey wrote: | Super interesting - what would you like to see? Like USD/USDC | swappable accounts or something? | kommstar wrote: | Right now I have an account now where I can deposit USDC and | spend via tap to pay/debit card. Basically just a debit card | linked crypto account, rewards are $$$ (4%) and adjusting | balances is fast and easy. Also programmable so I can replace | what is spent without having to manually transfer. This helps | tremendously with managing the families access/budgeting of | funds. | | Would also be nice to have an account where legacy payments | (ACH) can be made that also has an interface to deposit USDC. | Right now I need to ACH deposit to my bank account (from | crypto), and then ACH withdraw to pay the bill. Eventually | you could just get rid of the ACH part and convince the | accounts receivable to accept USDC (and profit?). | | Bringing both these services under one roof so it is a bit | easier to manage would be the holy grail of legacy and future | financial products. | pc86 wrote: | What is this account through? That sounds interesting. | chologrande wrote: | This looks really cool, but can someone help me understand more | about where it fits in the market? | | Is this for me, as a developer to just make my own bank accounts? | Does this allow me to create a bank frontend SaaS and use column | as the backend? Can I originate loans with this platform for | myself, or maybe to others somehow? | | tl;dr Who is the customer? | ModernMech wrote: | A little off topic, but I find it amusing phone booths have been | reinvented. Also funny they look like refrigerators: | | https://column.com/company | | Cool that a husband wife team is doing this, I wonder what their | relationship is like. | fensterblick wrote: | Questions for the founding team, and others: What books or | resources did you helpful in understanding the plumbing of the US | banking system? | whockey wrote: | Central Banking 101 by Joseph Wang is incredible. | strzalek wrote: | Payments Systems in the U.S. by Carol Coye Benson is a great | starter - it's a mandatory onboarding read at a lot of fintechs | shivaas wrote: | https://www.fintechbookclub.com/ and | https://notafintech.company/ are two other resources I'd point | you at to learn more about US banking and fintech in general. | strzalek wrote: | Hey, I'm an ex-Square that is part of founding engineering team | at Column. My team will be monitoring this thread and we'll be | happy to answer any questions! Especially those about ACH, I'm | sure you have plenty and we know it through-out! | crate_barre wrote: | Do you guys issue physical cards or checks? | strzalek wrote: | We're an issuing bank and sponsor card programs on Visa & | Mastercard. Our partners can offer both physical and virtual | cards to users. Checks are currently in beta but please get | in touch if we can help! https://dashboard.column.com/contact | thrill wrote: | Maybe do something fancy like X1 and offer a metal card? | instagary wrote: | Can you talk about instant ACH, why do some charter partners | like Robinhood and Coinbase support it but other legacy banks | don't? | | How is instant ACH different to regular? Also, is it true that | ACH is not instant bank to bank - essentially the banks settle | up at the end of each month with 1 giant transaction? | | What about P2P support via Zelle, I recently learned it's | lipstick on a pig and basically ACH under the hood. | | Sorry in advance if the questions are outside the scope of this | thread. | [deleted] | igrav55 wrote: | This looks awesome! A few questions: | | - Will there be an openapi spec to generate clients in most | languages? | | - Do you support depositing checks via the dashboard? | | - Out of curiosity, what database are you using for high | availability? | Asafp wrote: | Hi, I am an engineer at Unit.co, a company that also builds | Banking as a Service. We use PostgreSQL as database, and | currently thinking about adding ElasticSearch to allow our | users to do text search. | SgtBastard wrote: | Friend, its in poor taste to hijack a question about a | competitors product to spruik your own - I would be less | likely to consider Unit.co as a result of what you're doing | here. | drogus wrote: | Looks interesting! Do you plan to create an SDK? Or is | interfacing with the HTTP API will be the best way to use the | app for now? | Asafp wrote: | earthboundkid wrote: | How much COBOL do you have to write on a daily basis? | Asafp wrote: | Hi, I am an Engineer at Unit.co, a company that also builds | Banking as a Service. I can share that not only we do not use | COBOL, but our entire backend is written in Pure Functional | Scala (and typescript for UI). | strzalek wrote: | Zero. The whole stack is built in golang from scratch and we | integrate with FED over some... interesting protocols. | thecosas wrote: | we integrate with FED over some... interesting protocols. | | Would love to know more! | usrn wrote: | My understanding is they sftp batches of CSV files at | eachother. | shivaas wrote: | this is probably closer to the truth that you might have | imagined :) that at that most of the $1T+ ACH transfers | that happen daily in the US banking system happen over | plaintext files and SFTP (source: I've written one of | these files) | jawspeak wrote: | Using Fedline Command with Axway by chance? E.g. see https: | //www.frbservices.org/binaries/content/assets/crsocms/... | matrix of ways to connect to the Fed. | sunsetSamurai wrote: | how's the team liking using go so far? any pain points? | Brystephor wrote: | 1. Can you share some use cases for this? | | 2. It seems like I can use your API to create bank accounts | with your bank. Does this mean I could become a "bank wrapper" | and use your API to generate real bank accounts and become a | digital bank without having to go through the legal processes | of becoming a real bank? | simplify wrote: | Off topic: Does founding engineering team mean founders who are | also engineers, or does it mean pre-launch engineer hires? | mdaniel wrote: | > Create account numbers that point to a single bank account and | create specific permissions and limits for each one. | | I _love_ that; there are so many places that give a 6% discount | for using ACH but I don 't want to give out my bank account | details willy-nilly | | --- | | If you have influence over it, I wouldn't recommend having | https://status.column.com/uptime default to "Sandbox" since I | doubt seriously that's what anyone would care about when going to | an uptime page, and can also mislead a reader in a hurry if the | Sandbox environment is having woes but Production is fine | | nit: I would guess you meant "sweep" not "sweet" on | https://column.com/bank-accounts | | > We support FBO, sweet, clearing and custom account types -- all | FDIC insured. | Brystephor wrote: | Credit card networks offer a similar thing. They call it | payment network tokens. Basically, the network gives the | merchant/processor/store/etc a Uuid string that's an identifier | for your credit card. Then the merchant sends that UUID string | (the token) to the network and the network sends the real | credit card details to the issuer for authorization. | | So instead of giving merchants real financial info, they just | get a pass to charge your credit card without the details of | it. | mdaniel wrote: | Yes, I've been making heavy use of that over the years, from | Amex's early offering through Privacy.com and now Capital | One's anemic offering | | There's still quite a few merchants which give it the evil | eye since evidently one can distinguish them from "real" | credit cards if the processor chooses to look, but it's | better than nothing | | Column is the first I've ever heard of a bank offering this | level of financial firewalling | theonething wrote: | Yeah, I use Privacy extensively and on rare occasions have | been rejected by merchants because of their no gift cards | allowed policy. So apparently that is the category Privacy | virtual cards come under. | skybrian wrote: | Some context: Patio11 wrote a bit about how businesses can use | virtual account numbers this week: | | > This is generally done via a mechanism called Virtual Bank | Accounts (VBAs), which are a product available from the banking | industry in Japan, the U.S., Mexico, Brazil, and many other | countries. You contract with your financial institution of | choice to reserve a block of bank account numbers corresponding | to a far smaller number of actual bank accounts. You give out | those numbers to your customers rather than giving out your | "real" bank account number. You then take action based on which | account number your customers use. | | > Due to technical and social issues within the financial | industry, the banks offering VBAs generally expect you to bring | your own implementation work at this point. Should you e.g. re- | use VBAs within your block? They probably don't have a | straightforward answer to that question; up to you. Should you | treat them as secrets? Up to you. Should you share them between | customers? Up to you. What should you do once you know one of | your VBAs has received a transfer? The bank will give you your | money, what you do with the data is up to you. | | > Stripe does basically the simplest thing that works: give | each customer/business pairing a unique VBA, shared across all | invoices for that pairing (to avoid e.g. a customer not | updating their supplier management system with the new bank | account number on the second month's invoice). Use ability to | introspect invoices (and their open/closed/etc state) and | inferences to tie incoming payments to the invoice they're most | likely associated with. Kick all the exceptions to a human or | computer system, whichever the user specifies. | | https://bam.kalzumeus.com/archive/a-game-that-intentionally-... | whockey wrote: | I'm glad you noticed the account numbers as pointers concept - | we think its pretty cool. I think there's some rad use cases | that people will come up with! | | Thanks on the typo...deploying now :0 | rundmc wrote: | We have been looking for a US banking provider that could | handle this. Woo hoo. | | In RoW they are called virtual IBANs. Numerous use cases. | nickprins wrote: | One that I recently found out about is reconciliation from | https://bam.kalzumeus.com/archive/a-game-that- | intentionally-... | Q6T46nT668w6i3m wrote: | This is great. I designed a similar system at Simple and it | pained me that it never got implemented. | ahallock wrote: | Can someone re-create Simple with this? I loved that service. | wmf wrote: | I wonder how Column managed to launch when others couldn't. Were | the others too early? | dugmartin wrote: | I created an account just to check it out and the signup and | initial setup flow is very well done. Nice work. | ianstormtaylor wrote: | Wow, this is such an impressive launch/reveal in so many ways... | landing pages, documentation, philosophy, sheer scope. Congrats | to everyone on the team for the quality of execution! | chirau wrote: | What exactly is this? What does it allow me to do as a developer? | Is this similar to the stuff Stripe offers? | | I've been looking at the site and trying to figure it out, no | luck. | fierro wrote: | its for developers looking to build financial products that | need bank accounts, payments, card issuing, lending, etc. | Imagine you wanted to build Venmo; this would be pretty easy | with Column APIs. Create bank accounts, deposit/withdraw, and | send money between accounts programatically. That's probably | the simplest example I can think of. | [deleted] | monkeycantype wrote: | Long ago I was part of a team (but not the first core team) that | built a pension and investment system from scratch , because | there were no banking APIs available from anyone, we convinced a | bank to let's us connect to them as an ATM ___________________________________________________________________ (page generated 2022-04-21 23:00 UTC)