Fintech Rippling moves to JPMorgan Chase from SVB
Fintechs look to multibank strategies
Payroll provider fintech Rippling, formerly a Silicon Valley Bank client, has moved to JPMorgan Chase as SVB collapsed late last week.
The San Francisco-based startup already was in the process of onboarding with JPMorgan Chase as an additional partner, according to the fintech’s website. “We completed a long-planned transition to JPMorgan Chase to ensure that all future customer payments will succeed,” according to the website.
“Rippling switched our banking infrastructure from Silicon Valley Bank over to JPMorgan Chase, and all future pay runs will be processed through JPMC,” Rippling Chief Executive Parker Conrad said in a Tweet on Friday.
Rippling immediately began working with JPMorgan Chase to send employees funds for today’s payrun, via this alternate channel. Rippling extended our own collateral to fund these payments, while client funds are locked up with SVB.
— Parker Conrad (@parkerconrad) March 10, 2023
Fintech founder Tal Kirschenbaum, who held leadership roles at payments giant Melio and venture capital firm Pine Capital, told Bank Automation News how Rippling’s ability to pivot could be a learning experience for other fintechs in the space.
“Of course, that process had to be significantly accelerated and expedited in order to endure the continuity of their operation,” Kirschenbaum told BAN.
Multibank strategy
Rippling’s ability to quickly pivot to JPMorgan Chase reinforced the importance for fintechs to have a multibank strategy, Kirschenbaum said.
“Having more than a single provider, especially for such a mission critical type of capability, is something that is absolutely crucial for the operation,” Kirschenbaum said. “The importance here is really to minimize the risk of other funds being held, and being made impossible to access, as well as inability to continue a company’s core operations.”
For fintechs that use SVB as a primary partner for banking and services, “this has been a pretty substantial hit and one that will likely have limited [fintechs’] ability to provide their core product or service,” he said.
