Digital payments are one of the most exciting frontiers of innovation right now. New technology solutions are making digital payments faster, frictionless, and deeply embedded into the customer and operational experience. Yet, for many small- and mid-sized businesses (“SMBs”), these solutions have been largely inaccessible or required a leap from preferred financial institutions to untested challenger banks.

Extend, a digital payments startup and B Capital portfolio company, is closing this accessibility gap. They’re helping traditional banks innovate like fintechs, so SMBs get to keep their trusted financial partners while gaining a simple, powerful way to streamline payments.

We sat with Extend CEO & Co-Founder Andrew Jamison to hear his story as a Founder, understand the digital payments landscape, and how it drives Extend’s product vision.

(The below transcript has been lightly edited for brevity and clarity.)

Q: What are some of the biggest trends impacting the digital payments space?

Andrew: Embedded payments are top-of-mind, as they have profoundly reshaped the payments experience. Take travel as an example: people no longer have to think about payment when they’re getting out of an Uber or Lyft, after decades of pulling out cash or credit cards every time they used a taxi. Embedded payments have removed many friction points, and because of that, more businesses will want to fold that kind of payment experience into the services they’re delivering. Bain just released a study predicting embedded payments to grow to about $7 billion in transaction value by 2026.

The second trend, and one that is going to be critical for supporting this type of innovation, is greater investment in payments infrastructure. Banks can’t wait for homegrown innovation, especially as the banking landscape becomes increasingly competitive. Instead, they’re looking for ways to quickly help business clients build new payment solutions on top of their systems of record, and the way to do that is by using APIs. APIs allow companies of all sizes to deploy new products and features that will serve the needs of their customers without needing an army of developers and big technology budgets.

Q: How is Extend supporting digital payments for small and medium-sized businesses?

Andrew: While there’s been a lot of innovation in the payments space, my co-founders and I saw an unmet need among small- and mid-sized businesses. Payments constantly flow into companies and out to different vendors. Reconciling those payment flows can be very manual and error-prone; virtual cards introduce security, flexibility, and transparency. The challenge for many is that banks are sitting on legacy systems that don’t support virtual cards or that aren’t easily accessible, if at all, to SMBs.

We want to create a world where payments empower SMBs to achieve more with what’s already theirs. The best way to do that at scale is to deliver a market-ready spend management platform to banks – one that is integrated with card networks and processors, and which can be easily accessed from the very card customers already have in their possession.

Through bank partners, Extend gives thousands of SMBs across industries the tools to help them run their businesses more efficiently, whether that means controlling their working capital or simplifying and automating payments. We’ve built a flexible platform and API that allows businesses to create, send, and manage virtual cards accessed from their existing bank cards and integrated with their own core business systems. 

For example, we recently partnered with the Jacksonville Jaguars NFL team to help them manage their credit card spending and simplify expense processes for 200 employees. Instead of sharing physical corporate cards and trying to reconcile everything at month’s end, the team can now provision anyone with a pre-approved virtual card and use it to expense things in real-time. All that spending and data is tracked in one place, so the team can monitor and better manage and track spending over time.

Q: What is your background in the payments space and how did Extend come to be?

Andrew: I’ve been in payments and financial services most of my career. I was an SAP consultant for ten years. There, I was deeply involved in understanding how businesses move and control inbound and outbound money flows.

I then moved to American Express where, for around twelve years, I ran basically all of their payment products outside of corporate cards. Over that time, we were also looking to expand into different digital payment rails, which really whet my appetite for understanding how to bring the best assets from a payments infrastructure together to serve customers. That was also my first foray into entrepreneurship, and it helped ignite my passion for building products that solve major business problems.

So, I had this dream of building a payment infrastructure company. But it wasn’t until I casually told the idea to my friend and now co-founder Danny Morrow that we decided to make it a reality. I had a background in finance, and he had a lot of experience in technology and UX, so it was a perfect fit. Our third co-founder, Guillaume Bouvard, was a colleague of mine at AmEx. I knew he could bring a lot of valuable experience in operations and product strategy. The three of us spent the better part of 12 months thinking through and designing the product and raised around $250,000 from friends and family. After that, we raised our first $3 million funding round and officially launched Extend in the latter part of 2017.

Q: Why do you think partnerships are increasingly important for business innovation?

Andrew: As banks think about where and how they can continue to meet the needs of their customers with limited capital available, they will rely on technology partners that can quickly solve problems and build solutions for them. That’s what we enable banks to do, by accelerating their path to innovation for the benefit of their SMB clients.

For Extend, partnerships like the one we have with B Capital are also critical. It’s not just about the capital. We knew we needed a partner who could scale with the growth of the company and support us in good times and in challenging times. We also had a really strong connection with B Capital General Partner Sami Ahmad from the start. He brought in complementary expertise, asked great questions, and shared an incredible ecosystem of connections. This has fueled our efforts to help SMBs achieve more with their time, their company cards, and their business applications.

This information is provided for reference only and you should not rely upon this information to form the definitive basis for any decision, contract, commitment or action. Much of the relevant information is derived directly from various sources which B Capital believes to be reliable, but without independent verification. Certain statements reflected herein reflect the subjective opinions and views of B Capital personnel. Such statements cannot be independently verified and are subject to change.