Choosing a bank is more than just a financial decision. At Modern Treasury, we work with many companies building out products that require banking support. This guide will help you ask the right questions from the outset, because running a company comes with enough curveballs, and your banking relationship should not be one of them.
In late 2017, banks started rolling out Real-Time Payments (RTP). You can learn more about the history and promise of RTP in our previous post about it. Rather than rehash that background or answer common questions, this post will offer a step by step guide to building an app using RTP and the customer delight moment that comes with.
This post discusses some of the common tactics businesses use to collect and verify bank account details. Ultimately it is up to each business to decide how they want to approach these tasks. The approaches outlined below can be done in tandem or independently.
Ultimately, though, the mechanics are similar irrespective of what is being insured: an insurer first calculates the potential damage and the odds that damage might occur. Then, it charges a payment on a regular basis that, in aggregate across all those insured, is designed to make a profit for the insurance company itself. And finally, when and if the risky event comes to pass, the insurance company approves a payment to the customer that incurred the damage. That payout is called an insurance claim.
Regardless of specifics, however, the Income Sharing Agreement (ISA) structure is relatively consistent. To define it more explicitly, an Income Sharing Agreement funds a student’s tuition upfront in exchange for receiving a percentage of the student’s future earnings (hence “income-sharing”) based on a pre-defined formula. In this way, the funder can be thought of less as a debt investor and more as an equity investor, receiving “dividends” from the students future earnings.
There are many setups that can complicate the system, including collecting and returning security refunds, splitting rent between roommates, handling one-off fees or refunds, and other unique cases. And there’s a lot to think through if you want to start a company that deals with property management.