The fintech startup Regalii, which originally built technology to help immigrants pay bills back home, has pivoted. Under a new name, arcus, it is now helping banks reissue credit and debit cards to customers whose cards have been lost, stolen or breached. The change to the business model took place in 2016 and the company says it has been growing since then.

The mission is to solve a problem CEO Edrizio De La Cruz encountered last year. He lost his credit card, notified his bank and received a new card in the mail seven days later. Meanwhile, he forgot to update his Time Warner and Verizon accounts and got dinged with two late fees. He also had to update his card number at Amazon, Uber and several other services.

An autopilot world
“The default payment is becoming king,” says Edrizio De La Cruz, CEO of arcus. “And if it’s becoming king you want the best tools to empower that."

“The process is quite tedious, time-consuming and expensive,” De La Cruz said. “One in six Americans have that experience every year.”

For banks, these episodes do more damage than may be apparent, he said.

“Typically when that happens, you as a consumer are reaching through your wallet and get the next card,” he said. So a customer who has been using a Chase card for Uber might switch to a working Bank of America card. The bank could lose its top-of-wallet status permanently.

Once a bank loses its position as the dedicated card for a merchant, it is very hard to regain that status, he pointed out.

“The default payment is becoming king,” De La Cruz said. “And if it’s becoming king, you want the best tools to empower that."

Arcus has established direct relationships so far with more than 50 large billers in the United States. Arcus tokenizes cards and establishes a direct pipeline between banks and the providers of recurring services, keeping cards on file current.

Customers log into their online banking or mobile apps, select the providers of recurring services and update their card numbers, and then the system verifies their identities.

“Once you do that, you never as a consumer have to update your card across those services,” De La Cruz said. “You’ll get a notification every month and whenever there’s a bill due. If a card is lost, stolen, expired, it will be updated automatically in perpetuity. You never will experience a late fee due to a false decline, and the bank will never experience a false decline on its side. Most importantly, they’ll become top of wallet for all the services you have dedicated to that card.”

“That’s been more than enough for the banks,” De La Cruz said. “They understand this has been attempted by large networks before and given that we’ve gotten this far in this short amount of time, they feel they want to grow with us, as opposed to waiting until we have 100% of the merchants.”

Arcus also offers a financial hub that lets customers track and manage credit cards, loans and utilities in one place.

The company raised a $7.9 million Series A in December. Current investors include HOF Capital, Day One Ventures, IGNIA Partners, Winklevoss Capital, Kapor Capital and Maverick Capital.