Darragh Buckley
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The Peel with Turner Novak · Why Stripe’s 1st Employee Bought a Bank | Darragh Buckley, Increase
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Should a Banker Have an Uneventful Day?
Darragh Buckley says a banker should have an uneventful day, the same way an air traffic controller should. People do not want excitement from air traffic controllers. A boring stretch where nothing happened is the point. A banker should enjoy uneventful days, with a quiet satisfaction in reliably and regularly getting things done as expected.
The personality suited to a quiet day works well in banking. The biggest events in banking are generally not something anyone wants to see on a daily basis. Banking belongs with the underlying utilities of society, electricity and water among them. It is okay, and in fact good, when the utilities are uneventful.
Infrastructure should have no events.
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What Does Darragh Buckley Want an AI Agent to Do?
Darragh Buckley wants an AI agent to finish a purchase on its own. The agent needs a credit card and its own bank account so it can enter the 16 digits at checkout while he is away.
He is traveling to San Francisco and wants an agent to send flowers home as thanks for someone being with the kids. A local flower shop already has a checkout, so the agent does not need crypto. It needs a payment card. His agents have their own bank account, and when one needs more money it asks. One went through the $100 he had given it and asked for $100 more. He is not sitting in a synchronous approval for each transaction, and he is not thinking about the buy. The agent picks the purchase, including instant
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How Does a Payments Company Learn Fraud Patterns?
Darragh Buckley says a person at an early-stage payments company should look at every transaction until volume reaches about 5,000 transactions a day. Designing fraud systems in the absence of data will miss the fraud, even after deep thinking. Watching the initial activity matters far more, and he does not know how to build good risk systems without it.
The thinking still happens beforehand, and the company still collects the data. Patterns stay invisible until someone starts seeing the patterns. A person has a pretty effective neural net between the ears and should use it on the live flow. He can imagine AI helping with quite a lot of the work. He would still be surprised if a company did
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Why Did Patrick and John Collison Sprint While Unloading?
Darragh Buckley says Patrick Collison and John Collison sprinted while unloading a new office because they always asked why the work would not happen faster. A first office arrives empty, so the errand is an Ikea trip for six of the cheapest desks and the cheapest chairs. The usual pattern is to set a box down and walk back to the car. They picked the box up, walked it in, put it down, and sprinted.
He wondered whether the car was parked illegally. When other people are already running, being the one person who does not run stops being an option. The group gets there faster together, without rubbing it in when someone is slower. When the day involves a lot of traveling and movement, moving
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What Lesson Stuck From the Early Stripe Team?
Darragh Buckley says one of the most impactful and meaningful lessons from the early Stripe team was how much a small empowered team can get done. He walked into an early group with John Collison, Patrick Collison, and Greg Brockman.
Stripe was finally going to talk to the credit card network more directly. On a partner call, the person in charge of certification said the next date was six weeks away and six weeks should be enough. In startup time, six weeks felt as far off as 10 years. Someone on the call asked whether any time was sooner. Tomorrow at 10 a.m. was open, along with a warning that the team was not going to be ready. They signed up anyway. The person on the call still assumed
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What Happens in an Increase Sales Conversation?
Darragh Buckley describes a moment in an Increase sales conversation, usually with someone from product or engineering. They accept the APIs, then ask whether Increase passes through the input message accountability data and when they receive it. After three or four skeptical questions there is a sigh of relief and a dropping of shoulders. They have found their people, glad someone dropped down to the base level and surfaced it all with no abstractions.
The conversations carry a high degree of shared experience. The same recognition shows up around the ISO 8583 standard for the card network and a parameter the buyer cares about. Increase is about half engineers, and everyone is meant to tak
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How Does Product at Increase Differ From Stripe?
Darragh Buckley draws a hard line between product at Stripe and product at Increase. Stripe builds a clean abstraction so a developer who cares about payments never has to care about ACH or Fedwire. Increase does the opposite with the FedACH API: a parameter keeps the exact name the network already uses, and Increase does not invent a creative layer on top.
The rails underneath already moved as one system. Fedwire shifted to the international standard ISO 20022 at one moment, a hard cutover across the financial institutions of the nation. A transition like that looks like Y2K, the midnight rollover where you expect everything to break. The Federal Reserve was under constraints, so a hard cu
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How Do You Get Good at Compliance Exams?
Darragh Buckley says you get good at compliance examinations by running them on yourself multiple times a day, the same way an engineering team gets good at rolling out a new version by doing it dozens of times a day with no manual step.
A compliance regime called the travel rule covers the data elements that must travel with a wire once the dollar amount hits a $3,000 threshold. Build the rule into the wire processing system from the start, as an extra box the sender fills in, so it is part of the product. Waiting for the first audit and tagging the rule on later makes life harder. In an examination, reviewers hand over a list of data requirements and ask you to pull the elements so they c
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Why Did Increase Bank Take So Long to Build?
Darragh Buckley says Increase Bank took so long to build because the right capability and capacity take a long time to put in place. The acquisition closed more than a year ago. You cannot slap an API on a bank and treat the bank as ready.
Around 2010, a lot of community banks chased financial technology partnerships as a growth mechanism. They lacked the capability and capacity to do the work safely and soundly, and regulators pushed back. He thinks a lot of the pushback was appropriate, and there was skepticism that many smaller community banks knew what they were getting into.
Concentration can still be a problem, so a narrow focus needs watching. The point is to avoid wandering by acci
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Why Does a Layer on a Bank Core Look Wrong?
Darragh Buckley says a technology layer or an API talking to a bank core looks very like 2010 payments, and in his view the setup is probably wrong. A bank needs a technology muscle, dropping into the core instead of adding another layer on top of bank technology. He stays skeptical when someone calls for a rebuild, because a rebuild is usually an odyssey. Building on top of bank technology had already worked for 15 years, so it was worth a closer look at whether any parts should be replaced.
The closer look prompted Increase. Increase replaces both the bank core and the API used to talk on top of it, in the same way Stripe did in 2010. Work started in 2020 by building the technology with a
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Why Did Stripe Need Dozens of People for Bank Returns?
Darragh Buckley says Stripe ended up with dozens of people reconciling ACH returns because a trace ID in the file did not traverse correctly. Wells Fargo was altering the data element. The change was not unreasonable, and the engineers had not built it badly. It was not built in anticipation that a company would compose the trace inside its own product.
While building Stripe, he wanted banking technology that exposed all of the data and all of the capabilities by API. Originating an ACH, handling the return, hold harmless requests, and the dispute process at the end should all be available by API. He gets emails from his bank after someone has already pulled an ACH, asking whether he approv