Neo · Jul 13 · 27 min

Inside Flex: Stablecoin Rails, Net 60 Cards, and a Compliance-First Approach to Crypto Banking

With Shadman Ahmed

Key takeaways

Shadman Ahmed says the Net 60 Card offers up to 1.75% cash back depending on payment terms, along with up to sixty days of float.
Flex treats stablecoins as a banking rail like ACH or wire, not as a standalone product, and has launched a waitlist for Flex Global.
Shadman Ahmed argues that risk and compliance are the real moat, because a fintech that loses its partner bank is "dead in the water."

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Summary

Flex's new head of global and crypto describes a middle-market banking pitch built on long payment float, stablecoins used as a rail, and compliance he calls the real moat.

Shadman Ahmed, who now leads Global and Crypto at Flex, says the company's Net 60 Card offers up to 1.75% cash back, depending on a customer's payment terms. The card lets businesses float purchases for up to sixty days with no interest, and it is the main way Flex serves middle-market companies.

Credit for the middle market

Shadman Ahmed says the middle market drives probably 40% of revenue in the US, and he puts the number of businesses worldwide making more than $1 million a year at over 20 million. His example for the Net 60 Card: a contractor whose customers pay net 30 can float material purchases for up to sixty days.

He says Flex handles lending for the card in house and lends off balance sheet, with separate debt facilities raised for it. Column is the sponsor bank for its banking products, and Lead Bank is a partner bank for its credit cards.

“I think the answer is risk and compliance... if your partner bank says, I don't wanna support you anymore, it doesn't matter how many products you have. You're dead in the water”

Shadman Ahmed

Stablecoins as a rail

"Stable coins for us are not a product," Shadman Ahmed says. He wants them to be as easy to use as ACH or wire, so that customers "shouldn't be able to tell a difference nor should they care." He says businesses in places like Argentina, India or Mexico City are not chasing yield but capital preservation, which to them means the US dollar. Flex has launched what he calls a lengthy waitlist for Flex Global and says yield options are coming soon.

Compliance as the moat

Shadman Ahmed says what most fintechs get wrong is compliance, and that crypto-native people often treat KYC as a bad thing. If a partner bank drops you, he says, it does not matter how many products you have. He says Flex spends most of its effort getting the basics right, because in banking you "live and die by your reputation."

From banking to Mercury to Flex

Shadman Ahmed spent the first nine years of his career in banking at JP Morgan and Citi. He then spent three and a half years at Mercury, where he led and launched the crypto business, starting a couple of days after SVB collapsed, before joining Flex.

What comes next

Flex has released an early version of Beacon, a weekly insights product for business owners that Shadman Ahmed calls "Spotify wrapped" on a weekly cadence. Next, he says, are AI tools for accountants, a command line interface for accessing Flex data, and a consumer product requested by customers.

Shadman Ahmed does not expect a winner-take-all market. He points to how many chartered banks hold billions on their balance sheets and still do well, and he says Flex will compete on getting the banking fundamentals right rather than chasing trends.

Flex, Mercury, Brex, and Column come up most.

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