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???")
They seem to have bought Northern California National Bank in Chico, CA.[1] The Column web site doesn't mention it, but they still have a physical branch in Chico.
The FDIC gives their web site as "norcalbank.com", although it does show the name change to Column. Their site has no street address and "domain name only" TLS certificate from Amazon, so you don't really know for sure that column.com is connected to a real bank.
The terms[2] are very unfavorable to the customer, especially for a business which claims to be a real bank.
"THE MAXIMUM AGGREGATE LIABILITY OF BANK AND ITS AFFILIATES, AND ITS AND THEIR LICENSORS AND SERVICE PROVIDERS, FOR ALL DAMAGES, LOSSES, AND CAUSES OF ACTION, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, WILL BE TEN U.S. DOLLARS ($10.00)."
There's an arbitration clause, and they demand to use JAMS, which is not as well thought of as the American Arbitration Association. "To reduce the time and expense of the arbitration, the arbitrator will not provide a statement of reasons for his or her award unless requested to do so by all Parties."
This is about the level of legitimacy one sees with the typical crypto operation. If you lose money through an error at their end, they don't have much of an incentive to fix the problem.
[1] https://banks.data.fdic.gov/bankfind-suite/bankfind/details/...
Got to love agreeing to online contracts where it's not possible to make any changes! That said, isn't this a case where the FDIC steps in and restores a decent chunk of your account if the bank screws up?
Looks like the brick and mortar branch is staying open (for now).
Ironically, one that will probably not be willing to take the compliance risks of working with all the developers who are doing crypto operations, given how much they have to lose after investing in this bank and messing up AML.
They could carve a lucrative niche for themselves though, this looks slightly more competitive than the state-sponsored crypto banks in Wyoming for the customer. Unless something goes wrong.
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/
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.
Founded in July 2003 by Martin Eberhard and Marc Tarpenning as Tesla Motors, the company's name is a tribute to inventor and electrical engineer Nikola Tesla. In February 2004, via a $6.5 million investment, X.com co-founder Elon Musk became the largest shareholder of the company and its chairman. He has served as CEO since 2008. [0]
Who took ~$5 billion and counting from the government...
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.
Thanks on the typo...deploying now :0
One other minor (accessibility) thing on the Status page: The dropdown (Sandbox/others) doesn't get hinted with Vimium (a keyboard accessibility add-on for fox and Chrom) or also with qutebrowser (a keyboard-first browser)
There's some info about it here, but it's basically it's made as a <div>
https://stackoverflow.com/questions/53918093/how-can-i-make-...
In RoW they are called virtual IBANs. Numerous use cases.
> 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-...
So instead of giving merchants real financial info, they just get a pass to charge your credit card without the details of it.
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
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!
I'd avoid using any service to do this for you after what PLAID pulled off on people by storing their credentials and getting more info than what was actually needed.
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?
I would imagine that Column could provide similar their services to similar companies and make the development of financial products significantly faster.
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).
At this level of integration minutiae I don't see a the benefit in not integrating directly with card issuers and ACH.
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?
It doesn't mean employees get any say in anything at all, it just means the employees are the company's shareholders. The board and upper management still has full say in all policies and operations.
Source: I worked almost exclusively at employee owned companies (though not intentionally). Working for an employee owned company is not meaningfully different than working for a public company or private company.
BTW, ESOPs have significant tax advantages for a founder [2]
[1] https://www.irs.gov/retirement-plans/employee-stock-ownershi...
[2] https://www.forbes.com/sites/darrendahl/2016/07/07/if-you-di...
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?
I previously worked at Center (https://getcenter.com), which after a few pivots, landed on offering expense management and analytics software to businesses. They partner with a vendor (not Column) to issue credit cards.
Center gets a realtime feed of card activity into their system to properly categorize the spend based on various signals or rules, which may, for example, prompt employee to attach a receipt. They focus on companies with decent T+E spend because they get the card interchange fees — that's the biz model: earn money from the card spend / merchant fees (as opposed to competitors such as Expensify that charge per user/card/report/etc).
And for the business using Center cards, they get nice software, instant visibility into spend, spending controls, et al, all at no cost to them. I don't mean to make this an ad for Center (I have zero financial stake in the company), just illustrating what you could do atop a platform like Column based on this specific example I worked closely on.
According to Column, their credit card service remits 100% of the interchange fee to the developer company, so you could build any number of services to enhance this data and service.
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!
The product looks incredibly good. What I absolutely love the most is the fact the web site immediately addresses people with a human language at the left and plain code at the right. No marketingspeak. Love it.
However the title is a bit misleading. It says "a chartered bank for developers" while the correct title would be "a chartered bank for U.S. developers". I feel like in the IT community we see deeper diversity of nations and citizenships compared to the other industries, so much more people from the rest of the world.
To make sure I had to dug into the documentation. Indeed, US-specific properties are marked as required in the person creation API call[1]. So Column is a non-starter for anyone outside the `default_country`. It would be nice to mention this somewhere on the site perhaps to set proper expectations.
>Would love any and all feedback, thoughts and questions!
How about custodial accounts?
EDIT: add " coming into the market" to the end
What are your plans to offer these services in other countries?
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?
also: The little column icon slide to the top right on login is cool .
Thanks very much!
Can you talk a bit more about how KYC works at Column.
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?
I've come across a couple companies such as Mercury but they're only for business use.
I really just want a bank account with an API, that would be so, so nice.
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?
Use cases would be very helpful.
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.
- 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?
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.
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.
Money transfer license alone is quite expensive for each state.
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.
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.
Getting a new bank charter since the financial crisis of 2008-2009 has been virtually impossible. The number of banks in the US in the past decade or so has come down from ~6K to ~4K. New licenses for banks (State or Federal ) since 2008 have been negligible. So, let's buy a "small" bank. So far so good
Next part is core banking software as well as Money movement software. This is where is gets interesting.
Smaller banks use Fiserv/FIS/Jack Henry (and a long tail of other core banking providers) and larger ones have a mix of systems with legacy cores e.g. DXC, Misys and bunch of others. While it's tempting to build an entire banking stack from ground up it may not pass regulatory and compliance muster for a while. Plus even some the legacy cores have now built a rich RESTful API. Would be interesting to know how much of the core was built in house over the past 3 years
Next part is Money Movement. This is where ACH, Push to Card, Fedwire and RTP come in
ACH isn't that bad. Most banks use ACH "aggregators" which in turn connect to one of the two ACH Operators. Once a bank has a business relationship with the Fed it's not tough to connect to these aggregators and simply sftp files to/from them
Push to Card is available through VISA Direct and MC Send. Given their financial resources and fintech background it wouldn't be difficult to get a connection going there
RTP would be an interesting one but a relatively easy one since the Clearing House is already used to working with multiple banks and have "plug-ins"
So, now it all boils down to the business procedures and KYC/KYB on Fintechs that want to use Column's services. This can be done very efficiently online
The T&Cs are heavily skewed in favor of column. Some of them may be unenforceable. But those can be negotiated
Cool that a husband wife team is doing this, I wonder what their relationship is like.
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.
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...
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.
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.
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.
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.
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.
[edit] I'm not an expert but explained why I wouldn't do that personally in a peer to your reply.
I've had more than my share of mortgages and every one of them has had the equivalent of an "extra principal payment" line on both the on-line and off-line payment systems.
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.
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.
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.
Could you talk more about the monthly minimums? Also can I create personal accounts with this or is it just business accounts?
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?
If you comply with columns' t&c, your customers should be none the wiser.
I don't expect a SAAS app I pay for to show me the t&c of AWS and expect me to also comply with it.
You need a proof reader.
https://column.com/card-programs/
Own your economics
* You get 100% of interchange, control your unit economics, and build a company for scale.
+ * Unlike managed programs, we are built for scale and flexibility.
Developer-first card program
- * We are developers at our core. From settelement to clearing you control the process from our dashboard or API.
+ * We are developers at our core. From settlement to clearing you control the process from our dashboard or API.
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?
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?
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.
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.
Sounds interesting but if I don't know it is available in my country - I won't bother reading it.
Maybe this is exactly what I need.
It would be quite powerful and impactful if you have developer testimonials too.
1. Does this paint a bigger target on your back, exposing more via custom APIs than most?
2. What do you plan to ban via Terms of Service? Do you have the stomach for things other payment processors don't? (adult, fringe groups, etc.)
(I have an idea in mind :-)
EDIT: physical/virtual credit cards
I've been looking at the site and trying to figure it out, no luck.
I think you guys built the right thing.
Wish you all the best in the endeavor!
Btw, amazing brand name. Column.
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?