Nanopay has unveiled a new platform that will let companies process business-to-business payments between bank accounts across borders.
The platform, introduced last week, is currently in private beta. It will become generally available in February, initially enabling cross-border payments between Canada and the United States.
Cross-border payments with India and China will be added in Q2.
The platform will enable account-to-account payments, with full visibility and payment context with ISO 20022 metadata to enable straight-through processing, or STP.
The platform will give accounts receivable departments better access to the status of payments — whether they’re scheduled, pending or complete.
Payers will be able to control cash flow more effectively, and payees won’t face the cost and risk of using credit cards.
The platform will give B2B payers full visibility into foreign transaction costs when they make cross-border payments in another currency.
The Nanopay platform will be offered both as a Web-based application and an application programming interface, so third-party application developers can integrate B2B payments into their Software as a Service applications.
The private beta currently has 20 participants, Nanopay CEO Laurence Cooke said.
“The platform has a lot of promise,” said Ray Wang, principal analyst at Constellation Research.
Small and mid-sized businesses “need easy ways to go direct with transfers,” he told the E-Commerce Times.
How the Platform Will Work
Businesses have to sign up and create an account in the platform. They can then link their bank account information to process payables and receivables. Companies can initiate payment requests directly from their accounting system.
Nanopay initially will support Xero, Freshbooks and, soon, Quickbooks Online, Nanopay’s Cooke told the E-Commerce Times.
The platform will add detailed payment context through ISO 20022 messaging “to enable straight-through procession as well as detailed visibility for real-time UPS-like tracking of payments,” he said.
“International transfers are an area with significant opportunities for fraud,” remarked Rebecca Wettemann, research VP at Nucleus Research.
“Linking the process to accounting systems and providing a clear audit trail will leave fewer opportunities for fraudulent transactions,” she told the E-Commerce Times.
Nanopay offers real-time payments where possible.
“Wire transfer fees can add up, particularly for smaller companies managing a lot of international transactions,” Wettemann noted. “Depending on their financial service providers, the time to process a transaction can be slow or unpredictable.”
The Nanopay platform currently processes account-to-account payments through electronic funds transfer (EFT) in Canada and automated clearing house (ACH) in the U.S.
The Nanopay platform uses cryptographically secured payment messages.
“All Nanopay transactions are immutable, and the B2B application features two-factor authentication to ensure only authorized users can access an account,” Cooke pointed out.
The company also has been working on post-quantum cryptography, he said.
No More Banks?
All of Nanopay’s transactions start and end with a bank account, Cooke said, but, “rather than entering sensitive banking information, businesses can pay or get paid by using an email address to identify other businesses.”
The Nanopay platform “will take off because they’re removing the friction with financial institutions and simplifying the payments accounting nightmare most companies face when dealing with cross-border payments,” Wang predicted.
The Nanopay B2B platform will be available as a Web-based application and a JSON API, the latter for third-party appdevs to integrate B2B payments into customer SaaS applications.
“I like the notion of API access,” said Michael Jude, research manager at Stratecast/Frost & Sullivan.
“This would enable funds transactions to be built into many sales applications,” he told the E-Commerce Times. “If Nanopay is building in transaction management and tracking, it would be much easier to use than transactions that might not be executed in real time, and which might not have visibility built in.”