B2B Payments

FinTechs Take On Payment Rail Status Quo

Although SWIFT revealed plans for its account-to-account functionality last month, the announcement only began making headlines a few days ago.

Reports have said the move by the payments messaging company positions the firm take on payments giants Visa and Mastercard.

The account-to-account solution aims to streamline and accelerate domestic and cross-border transactions, with SWIFT calling the initiative an “ambitious platform expansion” that will enable the company to “support financial institutions to strengthen their positions in B2B payments and capture new volume in [small- to medium-sized business (SMB)] and consumer segments.”

Reports noted the importance of SWIFT expanding into the SMB payments arena beyond high-value complex corporate transactions. With Visa and Mastercard each having made significant investments to capture more of the SMB segment through an array of payment rails, including card, ACH, and proprietary networks, SWIFT is joining a competitive landscape that aims to overhaul the payment rail status quo.

Below, PYMNTS looks at some of the other payments and financial technology companies that are either innovating on top of existing rails or looking to bypass those legacy networks altogether with entirely new solutions.

Sila Raises Funding to Nix ACH

Payments FinTech Sila offers an Infrastructure-as-a-Service platform to help companies more seamlessly integrate compliant payments capabilities within their solutions via application programming interface (API), with an integrated stablecoin, SILA. The company recently announced $7.7 million in new funding co-led by Madrona Venture Group and Oregon Venture Fund, while Mucker Capital, 99 Tartans, and other backers also participated, according to a company press release.

While the company’s API allows for white-label ACH processing, Sila has the payment rail in its crosshairs, with Sila CEO and Co-Founder Shamir Karkal describing ACH one of several “outdated payment systems” upon which the global financial system operates.

The company said it will use the funding to focus on growth and develop new product features.

Billhop Eases B2B Card Acceptance

In a collaboration with Visa, Ireland’s Billhop has announced a new service aimed at making it easier for businesses to pay their B2B suppliers via commercial card, even when vendors don’t accept them.

The technology aims to mix payment rails, with companies paying their invoices via card on the Billhop platform, and Billhop paying those vendors via direct deposit to their bank account. The company has rolled out its service in the U.K. and Sweden, it noted.

Sweden Adopts Europe’s TIPS Infrastructure

While Sweden continues to use its national currency, the Swedish krona, rather than the euro, the nation has recently signed an agreement with the European Central Bank (ECB) to facilitate real-time electronic payment settlement in krona using Europe’sTARGET Instant Payment Settlement (TIPS) payments infrastructure.

An announcement earlier this month said the ECB, the Eurosystem, and Sweden’s central bank Sveriges Riksbank have signed a cooperation agreement that opens access to TIPS for Sweden in support of Sweden’s own real-time payment service RIX-INST.

“Sweden is one of the most advanced European countries in terms of use of instant payments,” the European Central Bank said in its press release.

In a statement, ECB President Christine Lagarde said, “In crisis times, this agreement is a good example of strong cooperation between central banks in Europe. Our real-time settlement platform is a pivotal contribution to Europe’s endeavors to satisfy citizens’ increasing demand for faster, cheaper and convenient payment services without compromising on security.”

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LIVE PYMNTS ROUNDTABLE: MODERNIZING & SCALING FOR THE NEW NORMAL

The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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