Payment technology entrepreneurs are turning a corner, looking for industries that can benefit from embedding digital payments into their otherwise rigid workflow.

"There's a recognition that it's not one size fits all," said Reetika Grewal, head of Silicon Valley Bank's payments strategy and solutions group. "It's not that different than how fintech as a sector emerged, becoming more specialized over time."

The latest class of the Commerce.Innovated accelerator program run by Silicon Valley Bank and First Data demonstrates a focus on changing industries in addition to streamlining how people pay. Payments are becoming a means just as much as an end.

Reetika Grewal, Silicon Valley Bank
"In the last class we saw the emergence of regtech as a sector, in this group we were seeing technology for digital health care and B-to-B commerce," said Reetika Grewal, head of Silicon Valley Bank's payments strategy and solutions group.

"In the last class we saw the emergence of regtech as a sector, in this group we were seeing technology for digital health care and B-to-B commerce," said Grewal, who has worked in both the technology and banking sides of the market, in stints at JPMorgan Chase, Clairmail and Pay by Touch. She has also been recognized by PaymentsSource as one of the Most Influential Women in Payments.

The new accelerator companies are Apostrophe, a health care savings startup for self-insured employers in Denver; Blueprint Registry, a Seattle-based P-to-P platform that targets fundraising; Finix, a San Francisco-based payments infrastructure platform enabling real-time push-to-card disbursements; and Headnote, a San Francisco-based transaction network for the legal industry.

"Until now it's been near impossible for law firms to bring 100% of their billings online," said Sarah Schaaf, CEO and founder of Headnote. General payment platforms prohibit lawyers' trust accounts, or one of the types of account lawyers are required to have in addition to an operating account, she said.

Schaaf has worked as a lawyer at her family firm and has practiced by herself, an experience that opened her eyes to the challenges of the accounts receivable part of operating a law firm.

"It is onerous, time consuming and stuck in the past," said Schaaf, who has also worked in Google's legal department.

Headnote's nonfinancial background lends a new vision into payments technology that is based on the legal industry more than the banking industry, Grewal said.

These new companies join prior accelerator participants such as Alloy, AppZen, Apruve, Cardflight, Dash, Float and LaunchKey. Silicon Valley Bank collaborates with First Data in several areas in addition to the accelerator, combining First Data's omnichannel, e-commerce and global payment acceptance with the bank's broad payment acceptance and access to the San Francisco Bay area's technology industry.

"Each company is solving a very clear problem," said Christine Larsen, executive vice president and chief operations officer at First Data and also a Most Influential Women in Payments honoree. "It's also good for our staff to get out of their day jobs and think about these disruptors."

First Data is in the midst of its own long transformation from a payments processor to a more diverse merchant services and payments technology company, she said.

"Competitions are definitely one way to spot not just innovation but also talent," said Gareth Lodge, a senior analyst at Celent. "But as with all of these things, how they are designed and run has a major impact on their effectiveness."

There are two things to think about, Lodge said. The first is to take value from the process, not just the output.

"For example, the approach to the problem might be innovative or different, and whilst it may not yield a result there, it might when applied to a different problem," he said.

Second, a well-framed challenge is more important than the wow factor, Lodge said. "Following the first rule, it might highlight where innovations could be made."

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