What is Missing From Instant Bank Payments With Arpit Goel, CEO of Root

Arpit Goel built his first company, Gamma, on a simple pitch: legacy data-loss-prevention tools took nine months to show value, and Gamma got customers there in two weeks. Palo Alto Networks acquired Gamma in 2021. Now Goel is running the same play in a completely different industry. Root is a payments orchestration layer that lets enterprises move money bank-to-bank in about five seconds, with no intermediary ever holding the cash. In this conversation, Arpit explains why he thinks the US is finally close to a tipping point on instant payments, why Root never takes custody of the money it moves, and how the company handles banks that can’t yet receive instant payments.

What We Covered

• Growing up in India, and the ADHD diagnosis that pushed him toward IIT Delhi
• Why he calls himself an “ignorant” founder rather than an experienced one
• The nine-months-to-two-weeks wedge that built Gamma, and why Root uses the same one
• Discovering the payments inefficiency by reading through ADP’s 10-K
• Why 40% of US SMBs don’t accept cards, and it isn’t about the fees
• The dual pressure of RTP and FedNow that made 2024 the right moment to start Root
• The heart, arteries, and capillaries analogy for how Root fits into the banking system
• What actually happens to money in the five seconds between sender and receiver
• Why reliability, not transaction scale, is the hard engineering problem in payments
• How Root handles banks that can’t receive RTP or FedNow
• Where stablecoins fit into a bank-rail-agnostic platform
• Why Root wants to be the pipes underneath the industry, not the brand

Key Takeaways

• SMBs refuse cards mostly because of settlement delay, not fees — restaurants earning their week’s cash on a Saturday night don’t see it until Tuesday, right when they need it most to restock.
• Root never takes custody of funds. Money moves directly between the sender’s and recipient’s own bank accounts, and Root charges a fee on top rather than earning float.
• Reliability, not transaction volume, is the hard engineering problem — Root has built retry and fault-tolerance systems, using the workflow engine Temporal, so a bank outage doesn’t have to mean a failed payment.
• Arpit sees instant payments as a market that hasn’t tipped yet but is close — RTP and FedNow now operating together create sustained pressure that neither rail created alone.

About Arpit Goel

Arpit Goel is the founder and CEO of Root. He holds a computer science degree from IIT Delhi and a PhD from Stanford, and previously founded Gamma, a data-security company acquired by Palo Alto Networks in 2021, where he went on to lead product for the data-security business.

Cleaned Transcript

Arpit (00:10): In the US, almost 40% of the SMBs, they say no to cards. A lot of people think that the reason they say no to cards is because of fees. It’s not because of fees, it’s because of delays. So think about that SMB. The maximum amount of people are dining at restaurants during weekends. Weekends is when they don’t get the money — money they get on Tuesday. And weekends is when they need to do the maximum shopping to buy stuff so that they can feed the people. And they run into a massive cash flow crunch during the time when they need their cash the most. And hence they end up tapping onto big lines of credit. The SMB line of credit is such a big business that companies can get 15% APRs serving weekend lines of credit to SMBs.

Peter (00:54): This is the FinTech One-on-One Podcast, the show for FinTech enthusiasts looking to better understand the leaders shaping fintech and banking today. My name is Peter Renton, and since 2013, I’ve been conducting in-depth interviews with FinTech founders and banking executives. My guest on the show today is Arpit Goel, the CEO and co-founder of Root. Root is a payments orchestration layer that sits on top of the banks and lets enterprises move money bank to bank in about five seconds, with no intermediary holding the cash along the way. Arpit came to payments by an unusual route. He studied computer science in India, has a PhD from Stanford, and founded a data security company called Gamma that he sold to Palo Alto Networks in two and a half years. In our conversation, we talk about the aha moment that led to the founding of Root, why he thinks instant payments are closer to a tipping point than most people believe, how he handles the banks that are not on RTP or FedNow, where stablecoins fit in, and what success for Root looks like in five years. Now let’s get on with the show.

Peter (02:11): Welcome to the podcast, Arpit.

Arpit (02:13): Thank you, Peter, for having me.

Peter (02:15): My pleasure. So let’s kick it off by giving the listeners just a little bit of background about yourself. Why don’t you touch on some of the high points of your career to date before your current venture?

Arpit (02:29): Absolutely. I’ll start with my background. I come from a small town in India called Noida. My parents were doctors and they were entrepreneurs — they built their own hospital from scratch. I was a bit of an ADHD kid, had phenomenal siblings, both of them elder to me, one is two years ahead, one is five years ahead. So I was lucky to be able to learn their stuff earlier in life and that kept me engaged. The ADHD part landed me quickly into one of the top schools in India. So I landed in IIT Delhi, did my computer science there, and then landed at Stanford to do my master’s and PhD. I think the PhD was the time of reflection. The joke I say is that people say it’s hard to get into IIT and Stanford, but try getting out of it. It’s not easy to get out of it. So getting out of the Stanford PhD was very hard, or graduating from the PhD was very hard. And that definitely taught me a lot about how to structure your day in an entrepreneurship-like environment, how to really be in the midst of utter confusion and utter uncertainty and still be able to try to surf out of it and get through your resilience capabilities. So after my PhD, I spent a year in Target in the data science group, where I helped them redesign their loyalty reward program. And we took Target from Target Red, which was an old loyalty reward program, to Target Circle. And I was the chief scientist working with the SVP of marketing and chief data officer. And that’s where I discovered the very first problem around data privacy and data security that led to me starting Gamma as my very first company. Gamma was data security for SaaS applications. It was a very tough thing to do. I was, for the first time, solo — I was a B2B cybersecurity founder, faced with tons and tons of rejections. But somehow in two and a half years, we had a phenomenal exit into Palo Alto Networks, where I became the VP of product and GM for the data security business, which — before we joined — very few people knew about, because it was a tanking business and not doing very well. But somehow, with the support of my GM and our team and the existing Palo Alto team, we were able to flip it into a hundred-million-dollar-plus business and 4x the business in just two years. After that, I started teaching and investing in startups. I invested in about a dozen startups as an early, first-check tech investor. And then I ran into this problem around payments a year and a half later, and felt like the US payments ecosystem was way behind and we really needed to reinvent it. So that’s how we started Root about a year and a half ago.

Peter (05:18): So tell us a little about that, because going from data security to money movement is not sort of a natural evolution, I would say. What was the specific problem that you discovered, and what made you decide that that was the problem you wanted to sink your teeth into?

Arpit (05:36): First, I’m a little bit of a different entrepreneur — or maybe most entrepreneurs are like that — in that I do things for the sake of learning, and I do things because I find a big market gap or market timing, as opposed to exploiting my strengths, let’s put it that way. So when I started the cybersecurity, or data security, company, I talked to hundreds of VCs and they said, “Arpit, you are a first-time B2B cybersecurity solo founder with no experience in life. There is no way you can make it.” And I was rejected. But somehow that company made it. When I sold Gamma to Palo Alto Networks, my GM said, “Arpit, when are you starting your next cybersecurity company?” I said, “I don’t know if I’ll start my company or not, but if I do, it won’t be cybersecurity.” And he said, “Arpit, why would you not do that?” I said, “Because I’m done learning. I have to pick a new market next time.” Right. So that basically keeps that away. Now, so why payments? So when I was investing — I was angel investing into a lot of companies a year before I started Root — obviously, I was diligencing those companies. So one of those companies happened to be in the payroll industry. So I started researching the payroll industry a lot. I had a friend who was a GM at ADP and I set up a call with him, and I read through ADP’s 10-K. And that’s where I discovered a massive inefficiency. I basically discovered that a company like ADP — or any payroll company — is making almost 20 to 30% of their revenue because the speed of money movement is slow. So it’s almost like, because money sits idle, cash sits idle with them for five to seven days for every month for every single paycheck, they’re able to make a phenomenal amount of revenue through it, which is free cash flow pretty much. And then I started researching how big this inefficiency is. Payroll is not just one of the industries. But you look at any sort of marketplaces, any sort of creator economy, any sort of even bill payments, vendor payments, wherever money is moving — or insurance payments, or rent payments, or global money movement, remittances — there’s a ton of inefficiency introduced because there is a middleman who is taking responsibility of pulling money from the left-hand side and pushing it to the right-hand side, and taking advantage of that delay and calling it a technology gap or something like that. And obviously you have to be brave to take on certain tough things, or you have to be stupid, or a noob. So I’d say it’s almost a mix of both things. I came from India, where we paid each other, or moved money, only as cash, and then suddenly UPI came, which led to instant bank-to-bank, direct-to-Zelle-like transfers for every single transaction, pretty much. So I was in that frame, and I started questioning this finding with that frame — that why is there so much inefficiency in the US? And that led me to start reading extensively about what was happening in the US. And that was a time, you may recall, the Fed was constrained launching FedNow because RTP had not taken off at the rate that they wanted it to. And then I observed the FedNow launch, and the FedNow launch actually really created a duopolistic pressure in the US, so that instant bank transfers became a very real thing within just one year of the FedNow launch. So the other thing I always say is that I look for the timing. So, for instance, I wouldn’t have started Root in 2018 when RTP was launched, because the market was not picking up. But the market was actually picking up in 2024, because of both RTP and FedNow existing in coexistence and creating a duopolistic pressure. And hence we started Root toward 2024, pretty much like November, December. That’s why we started, or incorporated, the company.

Peter (09:27): I’m an immigrant as well into this country. I often think some of these problems need an immigrant’s perspective, because you see how it can work differently in another country. And so I think that can be powerful.

Arpit (09:40): And I think I will expand on it a little bit, right? It’s less about the immigrant perspective. It’s almost like you need the ignorant perspective. It’s almost like you have to come with first principles and be like, “I don’t know anything, let me question it.” If you know a bit too much, it’s very hard to question it. And that is the hard part. As you get more experience, right — I always say experience is also somewhat biased. It’s very hard to question your experience or question what you know. So, going back to the same question, another reason why I like to start in new spaces is because I don’t want any bias to come into my new company whenever I start.

Peter (10:16): Yeah. Okay. So then maybe we should just explain what Root does exactly. How do you describe it, particularly when you’re talking to prospective customers?

Arpit (10:26): Depends on the customer and the customer profile — that’s how we exactly define it. But at a very high level, right, every CFO, or every person in the world, cares about cash flow efficiency. They care about how fast money comes in, and can I send money as quickly as possible whenever I need to send. Right. It should not get stuck somewhere else. Right. So with that lens in mind, we say that whether you are doing very simple tasks like accounts receivable, accounts payable, simple bill payments, expense payments — or any of those tasks, or even just internal companies sweep treasury for maintaining liquidity across all of your bank accounts, you may want to improve the operational efficiency of how you manage the treasury — or if the customer is, let’s say, a marketplace customer who is moving billions of dollars, like let’s say DoorDash or Lyft, from the left-hand side to the right-hand side, right, or an insurance payouts company, let’s say a commission payouts company who is paying commissions to people — we say, don’t use an intermediary to hold your money and disperse out of it, just do directly bank to bank, from your source to the destination that needs to receive. It’s pretty much like how Zelle operates, right? Zelle has no intermediaries. But do it for your business, rather than just for the consumer and P2P use cases.

Peter (11:40): Obviously then you have a very big market if you’re doing it that way. But with that, you need to have, I guess, a motivated CFO — or I mean, someone who’s interested in disrupting the status quo. What is the pitch, and are you really focusing on instant, or is it bringing in an orchestration layer over everything?

Arpit (12:03): I mean, so look, we are a full orchestration layer on top of your bank. We say, program your treasury across all your banks, or your primary bank, whichever you want. And once you program your treasury, we take care of a lot of the bad parts about the bank integration, right? So most of the banks don’t even have APIs, right? They operate on legacy file system uploads, they operate on VPN tunnels talking to the Fed or to the TCH. And we just wrap around all of them and create a very simple, programmatic, or user-interface way for the customer to interact with their bank. So that is the most important thing we give to the customer. You’re right, in the payment space, behavior change is complex. So I like to joke around with some of my investors — I met one of them in New York recently, and he said to me, “You are in a race against time.” I said, “No, we are in a race toward time.” Because while the value prop makes sense, it’s harder to change behavior, and we need a leader mindset, a leader mentality, to actually adopt the new thing. But the value prop is very simple. We can do five-second instant settlement on holidays, on any day and any hour of the day, and improve the cash flow efficiency on both sides, whether it’s the sender side or the recipient side. So if I were to expand — and you raised this point already — the time is very big. Of course, we need to figure out where exactly to start and where exactly to land. But in the US, almost 40% of the SMBs, they say no to cards. A lot of people think that the reason they say no to cards is because of fees. It’s not because of fees, it’s because of delays. So think about their SMB. The maximum amount of people are dining at restaurants during weekends. Weekends is when they don’t get the money — money they get on Tuesday. And weekends is when they need to do the maximum shopping to buy stuff so that they can feed the people. And they run into a massive cash flow crunch during the time when they need their cash the most. And hence they end up tapping onto big lines of credit. The SMB line of credit is such a big business that companies can get 15% APRs serving weekend lines of credit to SMBs. So that’s the overall mission — how do we just improve the cash flow efficiency by letting money move faster and faster? Yes, we are starting with enterprises first who want to disperse or move lots of payments on a day-to-day basis, whether it’s like marketplaces, or whether it is vertical SaaS, or whether it is these commission payout use cases of bill payment companies.

Peter (14:32): As you said, like the restaurant that’s just a single-location restaurant that is having their biggest night of the week on a Saturday, and they’re not getting it ’til Tuesday — they would love to have that on Saturday night.

Arpit (14:43): Right. Yeah. So even there, our strategy is not to approach the restaurant directly, because we are building the more efficient pipes. So we would approach the point-of-sale companies and try to improve the pipes for them, so that they drive efficiency for their customers.

Peter (14:57): Okay, so I want to go back to something you said — five seconds, the money can move. What is happening in those five seconds? What rails are you using? And how are you eliminating the delay that, you know, ACH delays and most banks and most companies accept?

Arpit (15:17): So look, if you were to take a step back — and if I were to oversimplify the question of what is money — money is nothing but a giant database that needs to trust each other. It’s just a giant decentralized database that just needs to trust each other. So if we can just make the database trust each other, money can move in 0.5 seconds, or 0.1 seconds, or in like one millisecond, two. We just need the database to trust each other. So we are not custodial. It’s never like I’m taking custody of your money and making it move faster — I’m not doing any of that. The analogy I use is that the US has the liquidity mechanisms already built. So, RTP and FedNow. RTP is owned by TCH, FedNow is owned by the Fed. They are both different protocols, which means that one of them requires prefunding by the banks. So RTP requires banks to create a pool of cash — that becomes a trusted pool of cash for liquidity. Whereas FedNow is based on setting up master Fed accounts. So every bank that participates in FedNow has a master Fed account with one of the Federal Reserves in the US. Right. So that way they have created a decentralized, trusted database across each other — whether it’s through shared cash, or whether it’s through an interconnected database. Now, the analogy I use — and this is from one of our investors, one of our very, very smart investors — he kept asking, “What’s unique about you? Aren’t you basically RTP and FedNow?” He kept asking me that. And he used an analogy and said, “Aren’t RTP and FedNow the heart of the body?” So I said, jokingly — his name is Vasant, he’s ex-CFO of Visa and now on the board of Intuit and Delta — I said, “Vasant, my biology is not great, but let me use your analogy for a minute. You’re absolutely right. RTP and FedNow are the heart. They are the liquidity providers. They are the pumpers of blood. The big arteries in the body are the banks. The organs are the merchants. What is missing is the capillaries. And we are building the capillaries to make sure that the merchants can talk to the banks.” So ultimately, we are using the bank rails. We are not doing anything different that way, but we take care of doing the KYC, the KYB, the account verification, and wrapping around the clunky interface of the bank to make it very simple, very reliable, to allow for retries in case the bank system fails, because you never know when the bank system is up or not. So we make it fault tolerant. We build the entire technology layer around the customer’s bank and just tap into the liquidity network, so that the money is actually shown on the recipient side within five seconds.

Peter (17:57): So, and if you’re starting on the enterprise side, then I imagine 100% of your customers — the banks that your customers are using, like the marketplace or whatever — the banks that they’re using, they’re probably all on FedNow and RTP. But the people who they’re sending the money to, like say it’s a marketplace, some of those are on, you know, ABC Credit Union in their local town that has neither. How do you handle those cases?

Arpit (18:23): Absolutely. So that’s why I said we are a programmatic orchestration on top of the bank of the customer, and you got it right — since we are targeting enterprises, they are using one of the top 30 banks. And all such banks have RTP, FedNow, mostly both. In very few cases, one of those. And in that case, the recipient’s bank matters. Does the recipient bank have RTP receive, FedNow receive, or not? So what we know is that almost 90% of the DDAs in the US have RTP or FedNow receive — we call it instant bank receive. Everybody wants to receive money fast. But since we are a full payments authorization, we will fall back to a same-day ACH or next-day ACH. Some of our customers use it in a tactical way, too — they say that if the recipient wants to receive money in five seconds, they can pay more. So our customers make a revenue line out of this. But our job is just to improve the pipes. How our customer wants to use it, that’s their choice.

Peter (19:15): And so those banks that you list on your homepage — Wells Fargo, JP Morgan, Bank of America, HSBC, et cetera — those are the banks that your customers have accounts at. You’re not — or tell me if you are — contracting directly with those banks.

Arpit (19:31): So the way we operate is, we are integrated with those banks from an engineering point of view. We have what we call multi-tenancy, which means that whenever we get a customer who is banking with any of those banks, we can take that customer live by just signing one document. So it’s a deeper partnership than just an engineering integration. And we do share customers or leads, but it’s not like the bank is paying us, or we are paying the bank — that is not happening. But we are partners in all good regards, that way. We go to each other’s events, we do events together. We’re quite synergistic, let’s put it that way. And on the bank side, also, the math is very simple, right? If there is an intermediary in the middle — if the customer is putting money into an intermediary — then the money is going away from the bank. Right? As an example, if DoorDash is moving 100 billion a year and they are using an intermediary to disperse money to Dashers and restaurants, then for a few days every week, they have to hold five hundred million to a billion outside of the bank, into that intermediary. So even the bank’s net interest margin is hurt if there is no bank-to-bank direct money movement.

Peter (20:41): Could you handle a DoorDash today? That’s a lot of volume running through the pipes, and that’s not a trivial process.

Arpit (20:51): I mean, yeah, so it’s not like DoorDash is our customer today, right? But the way I like to describe it is — we are the same team, right? We built Gamma, we scaled it to Palo Alto scale, and now we’re engineering Root. At Gamma, we were scanning like tens of millions of messages every five to ten minutes. And the use case was different, because we were scanning every single Slack message, every single email, every single Atlas indicate, and telling what is sensitive and what is not sensitive, because we were doing data security. So from a scale perspective, payments doesn’t have scale, right? From an engineering scale perspective, payments doesn’t have scale. Even DoorDash, at their hundred billion a year — if you make it at a daily level, right, 100 billion divided by 300, that would be what? And average ticket size is, let’s say, five hundred dollars. So maybe a hundred thousand transactions per hour. So it’s pretty small from an actual transaction perspective. So the risk is not the scale. The risk is what happens if the bank is down in that one hour and the transactions start failing. So reliability becomes a lot important, or fault tolerance becomes a lot important. So we have built very, very deep — we use this service called Temporal. We love it, it’s awesome. That just allows us to retry things, and we know exactly when to retry and when not to retry. We have intelligent retry systems built. So we have a lot of resiliency built around the situation if the bank infrastructure fails — and banks do fail. There have been cases where banks are just not responding for a couple of hours, but we have not let a single transaction fail for our customers in those two hours — that has happened in the last few months. So this is, by the way, some of the technological difference: if you are a custodian, you can say the transaction happened, but the transaction may or may not have happened — you can play around with things. But when you are a non-custodian, when you are a true technology provider, right, a true software provider, you have to really build more systems to be able to take care of the reliability component. Scale is less of a risk; reliability is more of a risk.

Peter (23:01): Right. Particularly when it’s instant. If you’re the custodian of the money and it’s not instant, you can have your systems go down for half a day and no one knows.

Arpit (23:09): That’s correct. So we have webhooks built. We would say that something is going wrong and hence this will be delayed.

Peter (23:16): So then what’s interesting to me, just in the payment space — I mean, I’m seeing a few more real-time payments that I see coming into my account or what have you, but the vast majority of the country is still operating on this two-day-delay ACH kind of thing. I’m just curious about how you kind of think about this transition that is happening. Is it — like, I thought by now we’d probably be further ahead than what we are, if you looked at five years ago. But you got into this two years ago, so it’s not like it’s — you probably came in with your eyes wide open. But does the transition to instant, it seems to be taking a while. What’s your commentary on that?

Arpit (24:00): I mean, I don’t disagree with you. And this is exactly what our investor was saying — that payments is a race toward time, not a race against time. But the question is, how did you feel receiving that five-second settlement?

Peter (24:14): No, I love it. Yeah. It’s fantastic. It’s fantastic.

Arpit (24:17): And why, why, why did you love it?

Peter (24:20): Because suddenly I could — I had that money and I could move it somewhere, I could pay something. Or it just — I didn’t have to, you know, it didn’t have to sit and wait. I didn’t have to wonder when that’s gonna hit my account and the available balance will go up.

Arpit (24:31): So now imagine that already in the US, almost 40 to 50% of the people are individuals, freelancers, or doing contractor work, and doing it at multiple companies, who are receiving money — bills, or maybe regular payments for the work they are doing. And let’s take an example of an Uber driver who’s also doing DoorDash grocery delivery, and also doing Instacart shopping, or maybe selling some stuff on Etsy. Imagine their life — that they have to sit at the end of two weeks and reconcile all these pieces from the last two weeks, and they have no clue: did it hit, did it not hit? And maybe they’ve been charged with a bunch of overdrafts in the last two weeks, because they were living paycheck to paycheck. So the point is, there’s always this unstable-and-stable-equilibrium setting, right? And — my PhD was in game theory, so I understand what is an unstable equilibrium and what is a stable equilibrium. And it just takes a little bit of a nudge to go from unstable to stable. I’ll give you a very simple example, right? I mean, if you look at a seesaw, right — the seesaw is like this, right, this is the stable equilibrium of a seesaw, right? But if you somehow make it like this, vertical, and perfectly align it, it will still stay like that, it will not move. But a little bit of wind, and it will come back, swing, and come to the stable equilibrium. So there’s an unstable equilibrium. So, to answer your question — yes, I agree, we have been in the unstable equilibrium for many, many years. The nudges are happening. The government wants money to move fast, and things are getting tipped. If we can just make people hear, listen, feel, experience what it means — just like you did — there is no going back.

Peter (26:11): There’s gonna be a tipping point at some point where the DoorDash driver, or whatever, is gonna say, “Well, I’m not doing you anymore,” ’cause they offer me instant payments — ’cause a lot of them will offer instant payments, most of them offer instant payments with a fee.

Arpit (26:24): And it’s less about the fees. The thing is — and again, I keep taking India as an example, and Brazil is also a phenomenal example, but I’ve not spent a lot of time there — in India, the person comes to your doorstep, delivers you stuff, you tap a button, they see the money in their bank, and they go away. Reconciliation done. They don’t have to wait two weeks and be like, “What did I receive, or did I not receive?” Right? So it cuts through the friction, it cuts through the inefficiency, it cuts through a lot of things, and it’s better for society overall.

Peter (26:52): And just on that — it sounds like your platform is payment-method agnostic, which I’m curious about — stablecoins, because there’s obviously a lot of the world, particularly the developing world, that uses stablecoins for payments. Have you integrated any stablecoins into your technology today? Or what are your plans for that?

Arpit (27:13): I have a very consistent thought about stablecoins that hasn’t changed for the last two years. And all the changes that we have seen in the last two years around the Clarity Act, or the Genius Act, or whatever the latest version of that act — they’re all pointing us in one direction only. So, two years back, I had an argument with a friend about stablecoins, and I jokingly said that there’s only one equilibrium of stablecoins, or there’s only one equilibrium of stablecoin issuers — that is, they have to be regulated like a bank. So the entire iteration of the Genius Act, the Clarity Act, they are all taking them toward being regulated like a proper bank, because you cannot issue a currency without having the capital rules. So in that model, for us — in my mind, stablecoin issuers, whether it’s Circle or Tether or whoever — for us, they are just another treasury account that a customer chooses to keep money in. So we are agnostic, we integrate, and we want to integrate. It depends on whether the customer comes and says, “We want to bank with JP Morgan,” or “We’re banking with JP Morgan,” or “We’re banking with JP Morgan and Circle.” And for this 10% of the population, we use Circle for disbursements. And for this 90%, we use JP Morgan and Strike for disbursements. So, short answer: we are agnostic, we are the orchestration layer in that regard. But personally, I feel that stablecoin issuers are getting closer and closer to becoming a bank. Circle acquired — finally, I think they received the OCC approval about a month ago. So it’s just coming together.

Peter (28:45): No, I think your prognostication two years ago was correct. We’re certainly moving in that direction. So a couple more things before we close. I want to talk about the competitive market, because you are not operating in this by yourself. There are obviously big names like Airwallex, you know, Modern Treasury, Orum that was bought by Stripe. Why do companies pick Root over your competitors?

Arpit (29:09): Hard to answer from the customer’s point of view, why would they pick us against others? Because, A, we have not run into a lot of those situations in the past. And the reason being that from a go-to-market perspective, yes, we are closer to Airwallex, we are closer to Stripe, we are closer to Hyperwallet, PayPal, right, on the disbursement side — we are closer to those. But if you look at the true mission, or the differentiation perspective, we are closer to treasury management companies like Kyriba, or GTreasury, or TIS, or FIS, and so on, right. All we are saying is, they were doing things in a clunky way — we just make it programmatic and very easy to use. So it’s weird — we are attracting customers who would otherwise use Airwallex or Stripe on the disbursement side, but we are selling them programmatic treasury. So as soon as they realize that this is a cash flow operational efficiency product that works like the technology of Airwallex or Stripe, it becomes an easier choice, because money stays inside the bank and money goes from bank to the destination. Because when companies choose these treasury players like Kyriba, they know the clunkiness of the final leg. Because Kyriba, and even SAP or S/4, will generate all the payment files, but then you have to go and upload into the bank, and that may break. And then you have to go and regenerate it and change the formatting, and then go and upload it, and it may break. And it’s okay for 100 transactions, but if you have to do it for millions of transactions, it’s not feasible. So short answer is, go-to-market-wise, yes, we run into Stripe and Airwallex on the disbursement side. But true technology-wise, we are closer to programming your treasury. And hence the choice is easy — if cash flow operational efficiency is key for the customer, it becomes an easier choice.

Peter (31:00): Okay. So then what’s the vision here? Take us through, like, five years’ time. I mean, you’re obviously the infrastructure behind a lot of the payments, but is this going to be something that gets commoditized over time? I’m just curious about where you feel like Root is going to sit, and what would be success for you in five years?

Arpit (31:22): Also, look, I would love to have this commoditized. So, what does commoditize mean? Like, PIX is commoditized, or UPI is commoditized, right? So, in the environment where the US is this — I call it like a capitalist democracy — where it’s very hard for the government to come and say “this is the way to do things,” they will keep nudging, right? And they will create the right incentive structures for nudging, but they will not come and say, “Hey, do this, otherwise you’re not a bank.” I would love for a situation where the government takes a stronger stance, because it’s good for the economy, it’s good for the government, it’s good for the everyday merchant, everyday consumer. I would love for a situation where there are hundreds of Root-like companies that can emerge and build the ecosystem faster and faster. But we are not there yet. Right now, the incentive scheme is not that easy to devise. So we are kind of taking an early leap of faith and making it happen. So, to answer your question — if the entire US can touch, feel, and understand five-second settlements in the next five years, I think we will have tipped the equilibrium from unstable to stable already. Right, right. And we want to do it by being the developer infrastructure company. So we want new-age payroll companies to be created. We want new-age bill payment companies to be created. We want new-age remittance companies to be created. We want new-age EWA companies to be created. We want new-age — whatever you want to call it — insurance payments, rent collection companies to be created. That’s the way we want to proceed, rather than trying to be the brand. Right, we don’t want to be called the network. We are under the hood, just the pipes, to let everybody experience what instant five-second settlements and programming your treasury can actually mean.

Peter (33:11): Okay, well, that’s a good place to end it there, Arpit. I really appreciate you coming on the show. It’s fascinating learning more about your company. So, yeah, best of luck.

Arpit (33:20): Yeah, thank you, Peter. Those were very nice, fun, technical questions.

Peter (33:31): Arpit put on his game theory hat there and described US payments as an unstable equilibrium — a seesaw balanced perfectly upright that looks stable until the first gust of wind. Instant payments hasn’t made enough of a dent yet to tip the seesaw, but it is coming. I have been covering real-time payments long enough to be impatient about how slowly it is moving, so I found that framing useful. His point was that adoption doesn’t shift on argument — it shifts on experience. Once someone has been paid in five seconds, they do not go back to waiting until Tuesday. Which suggests that when this finally tips, it will not feel gradual. It will look slow, slow, slow, and then all at once. Anyway, that’s it for today’s show. If you enjoy these episodes, please go ahead and subscribe, tell a friend, or leave a review. And thanks so much for listening.