University Bancorp Announces Initial Pilot FinTech Customer for Its Revolutionary OND-Based Payments Hub

UNIB commits $5 million to a FinTech partner and $1.25 million to build a FedNow-connected, OND-based Payments Hub it expects to deploy in 2027.

Rhea-AI Summary

University Bancorp (UNIB) announced a strategic alliance with a profitable, rapidly growing FinTech to launch an OND-based Payments Hub at University Bank.

The alliance includes a $5 million combination of debt and equity investment by UNIB in the FinTech, commercial agreements to cross-sell banking and payments services across both customer bases, and the FinTech becoming the first production user of University Bank's new Payments Hub once additional functionality is ready, currently expected in 2027. University Bank plans to invest a further $1.25 million to tailor the Hub to the FinTech's needs.

The Payments Hub will connect to FedNow and legacy payment systems, use ISO 20022 messaging, and add an OND layer combining distributed ledger, object level security and quantum-computing-resistant encryption. The company believes this could be the first commercial use of quantum proof encryption in banking payments and that OND-based Digital Dollar use cases could enable an estimated $3,092.4 billion in value across multiple sectors.

Positive

• $5 million debt and equity investment in a profitable, rapidly growing FinTech
• Planned 2027 first production deployment of OND-based Payments Hub with FedNow
• Cross-sell commercial agreements across combined banking and payments customer bases
• Company cites potential OND Digital Dollar use cases totaling $3,092.4 billion in value
• Planned implementation of quantum-computing-resistant encryption aligned with ASC-X9 standards

Negative

• Customization of the Payments Hub for the FinTech is expected to require an additional $1.25 million investment by University Bank

AI-generated analysis. How Rhea-AI works. Not financial advice.

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ANN ARBOR, MI / ACCESS Newswire / September 16, 2026 / University Bancorp, Inc. (OTCQB:UNIB) or "UNIB") announced that it has formed a strategic alliance with a profitable and rapidly growing FinTech firm (the "FinTech"), a nationwide leader in purpose-built electronic payments serving a $1.5 trillion domestic market vertical, in support of the launch of an OND-based Payments Hub at University Bank.

This new strategic alliance includes multiple components including:

• a $5 million debt and equity investment by UNIB in the FinTech;
• commercial agreements for the cross-sell of banking and payments services across the combined customer bases; and,
• the first production implementation utilizing University Bank's new Payments Hub, an advanced electronic payments solution leveraging FedNow and an OND-based infrastructure. The FinTech will implement University Bank's Payments Hub in 2027 when additional functionality is production ready. The collaborative iteration of the University Bank Payment Hub to the specific needs of FinTech is expected to require $1.25 million of additional investment by University Bank.

UNIB's President & CEO, Stephen Lange Ranzini, stated "UNIB is building its OND-based Payments Hub because it believes that Information Technology is on the brink of a revolution. Solutions that combine traditional and quantum computing safe:

• Object Level Security;
• Network of Networks Architecture; and
• Distributed Ledger Technology (DLT),

(OND) with robust identity management controls and security best practices including quantum computing resistant encryption have the potential to provide revolutionary value creation by creating efficiencies across many large industry verticals not obtainable in any other manner.

A new Digital Dollar payment system that incorporates traditional and quantum computing safe OND could be a revolutionary advancement for industry and for the financial ecosystem writ large. For example, the following use cases would generate over $3,092.4 billion in value:

Adoption Opportunity	Value
Eliminate U.S. Government Improper Payments Fraud & Waste1	$2,000.0 billion	+
First Class Email	$516.2 billion
Bank Owned Credit Bureau	$35.2 billion
Health Information Exchange	$500.0 billion	+
Micropayments to Fund the Sale of News Articles	$25.0 billion	+
U.S. Dollar Digital Dollar Stablecoin Issued Via Depository FIs	$10.4 billion	+
Identity Assurance Federation	$1.6 billion	+
QR Code Network to Trigger Real-Time Payments at Retail Merchants	$1 billion	+
Global Payment Gateway (Real-Time Int'l Payments)	$1 billion	+
Single Window for Cross Border Trade Facilitation & Supply Chain Billing	$1 billion	+
Unbanked Financial Inclusion Facilitation	$1 billion	+
Total	$3,092.4 billion	+

We believe that these numbers are conservative. The value of the use cases for OND that incorporates a Digital Dollar is further validated by the market capitalization of the universe of cryptocurrencies, which as of September 16, 2026, was $2.58 trillion dollars. We believe that over time, OND that incorporates a Digital Dollar would displace most of this value, as a bank-centric OND with superior identity management (IdM), privacy, security and regulatory protections would provide a competitive advantage that would overwhelm firms that are slow to adopt.

What are OND's key components? At OND's base is a new layer of a database that utilizes:

• DLT or blockchain as a database;
• where all data is XML-tagged using the UNCEFACT standard and ISO 20022 compliant formats;
• and wrapped with Object Level Security including encryption that is conventional and quantum safe, which provides a nth level of segmentation to enhance security; and
• role based access controls, based on robust IdM based on role, authority and need to know.

In a business ecosystem environment, OND would typically hold transaction and remittance records that serve as the source of truth for each transaction. These documents would be native to a new technology overlay layer that would be XML enabled and leverage the Network of Networks approach (e.g., ATM Networks), enabling interaction by a multiplicity of parties involved in a transaction despite having disparate software systems hosted on disparate cloud-based networks that utilize incompatible software services.

While different use cases and industry verticals have unique requirements, because of the common core infrastructure required in any implementation, onboarding additional customer use cases to the University Bank Payments Hub will be very cost effective. The four key common core components of any implementation of OND are:

• An Identity Management (IdM) Enrollment and Authentication Identity Assurance Service;
• Cloud Based Big Data & DLT Database where the data is protected leveraging Object Level Security to provide fine grain control of access and use of the data. Such a system would enable the creation of a zone of privacy and assurance of security for individuals and corporate data which is not possible today with existing payment systems;
• Network of Networks approach to keep costs low in providing interoperability with existing legacy systems;
• Real-Time Payments functionality including Settlement utilizing a Digital Dollar or other Digital Fiat or Cryptocurrency. Because of Metcalf's Law² there is a strong network and platform effect which means that cooperation among banking industry players, including the Treasury, Fed and foreign counterparts would create more value rather than each bank issuing their own or creating their own OND.

An OND network layer also can easily and cost effectively ingest and export data to and from the legacy payment systems. The only points of integration between the Network of Networks layer and the legacy payment systems, would be via an "edge server", that holds XML tagged data exported or imported from a Depository Institution's legacy payment systems or from the Network of Networks layer. The integration required is equivalent to a banking corporate treasury workstation. The integration is modest, should only take weeks and have a modest cost.

By design and purposefully the amount of IT integration with the systems of legacy systems is kept to a minimal level. Since most corporate treasury workstation solutions support data exporting and data importing, the challenge of integrating OND-based electronic payments to existing corporate systems is mostly reduced to mapping and by using state-of-the-art mapping automation tools, the technical challenge is low, and the technical risk is low.

In collaboration with its vendors, University Bank is building the first OND-based Payments Hub, connected to FedNow and all legacy payment systems for its initial FinTech customer. The Payments Hub will be fully compatible with ISO20022 electronic payment messaging standards. University Bank was one of the initial 120 firms invited by the Federal Reserve to be a pilot customer for FedNow and its FedNow payments hub is live. The additional OND-based security, database and identity management elements will now be added to University Bank's Payments Hub, with the FinTech serving as the pilot customer.

Of importance, because University Bank's Payments Hub will deploy quantum proof encryption algorithms based on newly approved ASC-X9 technical standards, University Bank believes that this could be the first commercial implementation of quantum proof encryption in the banking industry electronic payments infrastructure. University Bancorp's Lead Independent Director, Mick Talley, has served for many years as the Chair of the ASC-X9 X9F1 Cryptographic Tools Work Group, and University Bancorp's President & CEO, Stephen Lange Ranzini, has served as the Chair of the ASC-X9 Real-Time Payments Study Group since its inception. Mick Talley was also deeply involved in writing the ASC-X9 Market Guide for the U.S. deployment of ISO 20022, and Stephen Lange Ranzini was one of five bank executives who served on the Federal Reserve's Secure Payments Task Force Steering Committee, which designed the security architecture for the new FedNow payment system. The University Bank Payment Hub is partly based on the submission that University Bank made to the Federal Reserve's Faster Payments Task Force. This submission was highly rated during that Task Force's vetting process, and that process also included a vetting process on behalf of the Federal Reserve by payment system experts at KPMG.

Now that it has committed to building the additional OND-based functionality for its Payments Hub, University Bank welcomes additional collaboration from FinTechs, banks and credit unions that seek a more secure, quantum computing safe, lower-cost and flexible architecture to enable new real-time electronic payment use cases.

About UNIB

Ann Arbor-based University Bancorp is a Federal Reserve regulated financial holding company that owns:

• 100% of University Bank, a bank based in Ann Arbor, Michigan;
• 100% of Bank of Whittier, N.A., a faith-based bank based in Whittier, California;
• 100% of Crescent Assurance, PCC, a captive insurance company licensed in Washington DC; and
• 100% of Hyrex Servicing, a master mortgage servicing firm, based in Ann Arbor, Michigan.

University Bank together with its Michigan-based subsidiaries holds and manages a total of over $36 billion in financial assets for over 185,000 customers, and our 544 employees make us the 5th largest bank based in Michigan. University Bank is an FDIC-insured, locally owned and managed community bank, and meets the financial needs of its community through its quality, creative and innovative services, as noted by its Google 4.9 Star rating. Founded in 1890, University Bank® is the 15th oldest bank headquartered in Michigan. We are proud to have been selected as the "Community Bankers of the Year" by American Banker magazine and as the recipient of the American Bankers Association's Community Bank Award. University Bank is a Member FDIC. The members of University Bank's corporate family, ranked by their size of revenues are:

• UIF, a faith-based banking firm based in Southfield, MI;
• University Lending Group, a retail residential mortgage originator based in Clinton Township, MI;
• Midwest Loan Services, a residential mortgage subservicer based in Houghton, MI;
• Community Banking, based in Ann Arbor, MI, which provides traditional community banking services and wealth management;
• Ann Arbor Insurance Centre, an independent insurance agency based in Ann Arbor, MI.
• Mortgage Warehouse Lending, a mortgage warehouse lender based in Southfield, MI.

CAUTIONARY STATEMENT: This press release contains certain forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements concerning future growth in assets, future profitability, efficiencies and economies of scale from the merger, the sustainability of past results, future products, valuations, economic, market or industry conditions, vendor and technology related risks, and other expectations and/or goals. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive, governmental and technological factors affecting our operations, markets, products, services, interest rates and fees for services, or the operations of companies that we invest in. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We undertake no obligation to update any information or forward-looking statement.

Contact: Stephen Lange Ranzini, President and CEO
Phone: 734-741-5858, Ext. 9226
Email: ranzini@university-bank.com

¹ The U.S. Government Accounting Office has identified over $250 billion per year of Improper Payments by the U.S. Federal Government, which an OND electronic payment system could eliminate.

² Metcalf's Law states that the value of a network or platform is equal to the square of the number of users or the number of functionalities.

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SOURCE: University Bancorp, Inc.

View the original press release on ACCESS Newswire

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What are the main components of University Bank's OND-based Payments Hub?

The OND-based Payments Hub will use a distributed ledger or blockchain database with XML tagging under UNCEFACT and ISO 20022 formats, object level security with conventional and quantum-safe encryption, and role-based access controls tied to identity management. It is designed as a Network of Networks layer that connects to FedNow and legacy payment systems through edge servers, allowing data import and export with relatively modest, treasury-workstation-level integration efforts.

How does University Bancorp describe the potential value of OND and a Digital Dollar?

The company states that example OND Digital Dollar use cases such as eliminating U.S. government improper payments fraud and waste, health information exchange, first-class email, and various payments and identity applications could generate a combined $3,092.4 billion in value. It characterizes these estimates as conservative and links them conceptually to the $2.58 trillion cryptocurrency market capitalization as of September 16, 2026.

What experience does University Bancorp highlight in payments and encryption standards?

University Bancorp notes that its Lead Independent Director, Mick Talley, chairs the ASC-X9 X9F1 Cryptographic Tools Work Group and helped write the ASC-X9 Market Guide for U.S. ISO 20022 deployment. Its President & CEO, Stephen Lange Ranzini, chairs the ASC-X9 Real-Time Payments Study Group and served on the Federal Reserve's Secure Payments Task Force Steering Committee, which designed FedNow's security architecture. The Payments Hub design is partly based on a prior submission to the Federal Reserve's Faster Payments Task Force that was highly rated in that process.

How does University Bank plan to integrate the OND layer with existing payment systems?

The OND Network of Networks layer will exchange XML-tagged data with legacy payment systems via edge servers. Integration is described as similar in scope to connecting a corporate treasury workstation, expected to take weeks at modest cost, with most of the work focused on data mapping using automation tools to keep technical complexity and risk low.

Is University Bank seeking additional partners for its OND-based Payments Hub?

Yes. After committing to add OND functionality to its Payments Hub, University Bank states that it welcomes collaboration from FinTechs, banks and credit unions that want a more secure, quantum-computing-safe, lower-cost and flexible architecture for new real-time electronic payment use cases.