Questing For Better, Faster, Cheaper B2B Payments

For cross-border service providers, the challenge is not just getting the infrastructure up and running, but also getting payers and payees on board to adopt their technology. Doing that fast and on budget no longer requires hiring an army of programmers, but tapping into APIs capable of interfacing with systems old and new, says nanopay CEO and founder Laurence Cooke. Find that interview, plus the latest headlines, and a directory of more than 40 B2B ecosystem providers, inside the latest PYMNTS B2B API Tracker™, powered by FI.SPAN.

B2B payments should be speedy and simple, but the process is often so slow and plagued by poor data that those in the industry could be forgiven for wondering if it had been cursed.

A new wave of FinTech startups is vying to vanquish these curses and usher in an age of faster, more affordable and simply more useful payments. What’s more, they want to wrap the transactions in data to reduce business costs and set companies at ease, showing them their money is moving just as it should be.

nanopay is among the would-be wizards hoping to help achieve this quest. To aid its efforts, the six-year-old Canadian payments technology startup is equipped with a B2B payments platform and API.

In a recent interview with PYMNTS, nanopay founder and CEO Laurence Cooke explained how the company is using those tools to serve the payment needs of businesses of all sizes, and shared his vision for the future.

“[Currently] payments are slow, prone to fraud and very expensive,” Cooke said. “We wanted to build something that was better, faster, cheaper and, importantly, data-rich.”

The Toronto-based company is taking aim at what it sees as slow transaction speeds, seeking instead to bring near real-time transactions into play and targeting the lack of tracking and other data on payments. The latter is particularly key for enabling straight-through processing, which Cooke said is appealing to both small and large businesses that can then skip accountant costs.

nanopay was founded in 2012 from an idea to turn a telecom billing system into a transactions engine and achieve more affordable, faster processing. Today, its offerings include a B2B payments platform that supports domestic Canadian payments. The company seeks soon to support cross-border payments between its home country and India, China and the U.S.

Conquering the Cross-Border Market

For most service providers, the challenge is not just getting the infrastructure up and running, but also getting both the payer and payee on board to adopt the technology. To sidestep that issue, Cooke said nanopay focuses on integrating with players that already work with the payer and payee.

For instance, the company collaborated with channel partners, which provides the entire supply chain and invoices to both parties in a transaction and delivers approximately two billion invoices annually. With the partnership in place, nanopay does not need to try to sign up each partner involved in those invoices. Instead, it gets involved by adding payments capabilities to the existing service.

nanopay also offers an integration process that can be finished in just a few days. This is done in part by providing an API rather than hardware that needs to be placed on premise, Cooke explained. The company works with corporations, banks and other FIs with older systems that can be difficult to manipulate and integrate with API s. To meet their needs, the company offers an API that can be adjusted to fit the institution’s existing datasets.

As such, its partners “don’t need to hire an army of COBOL programmers to interface with [an] API,” Cooke said. They can instead simply adjust the API itself to work for them.

The company is currently making big moves to expand its international payment capabilities, and it’s using a similar approach to its adoption strategy – namely, trying to reduce the number of players who need to interact to get things moving.

While traditional cross-border processes can entail hundreds of banks doing their own due diligence on each other, nanopay instead is forging “ecosystem- level” deals in India and China. That means banks must only do due diligence on one entity. The company’s international payment strategy also relies on using local payment rails.

Future Quests: Cryptocurrency and API

Cooke expects cryptocurrency to be increasingly important as the company continues to grow. He isn’t talking about bitcoin, though, with its sweeping value changes that are the nature of the beast. Instead, he anticipates country-backed digital currencies, issued by central banks, to emerge in the next two to five years – something like a digital sterling or digital U.S. dollar.

The two main forms this could take include a central registry-based model – which would be useful for quick, efficient transactions and larger sums – and a distributed model that allows for offline transactions and is better suited for low-value sums.

Regardless of which emerges victorious, Cooke believes nanopay is poised to serve both. It can handle central registry-based transactions in about one to three milliseconds, and it offers offline transactions in which the value is held locally – say, on a mobile phone, integrated circuit or smart card – and with a transaction speed of about 20 to 23 milliseconds. That slower time results from the need for higher levels of cryptography and more CPU processing.

Cooke foresees banks becoming increasingly API-driven, and that data in banks will become owned and controlled by the original consumer.

This will be a boon to businesses, which will then be able to obtain the data needed to automate their processes without having to give away sensitive bank account passwords and user ID information to third parties. Cooke feels nanopay will further smooth the way to businesses’ data access in the future, embedding that data with payments for straight-through processing and allowing it to automatically reconcile with the business’ bank.

While the company is currently focused on services such as cross-border and B2B, Cooke said long-term goals include achieving next-generation real-time rails based on digital cash and use cases in capital markets. For now, though, nanopay has other dragons to slay before taking on those quests.

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About the Tracker

The PYMNTS.com B2B API Tracker™, a FI.SPAN collaboration, serves as a monthly framework for the space, providing coverage of the most recent news and trends, along with a provider directory highlighting the key players contributing to the B2B API ecosystem.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.