Bridging the Gap Between Online Business and Transactional Banking

Bridging the Gap Between Online Business and Transactional Banking

by August 18, 2022

As the global economy shifts towards an interconnected future, digitalisation continues to transform the world of transactional banking. Fintechs often outpace traditional banking institutions when it comes to serving the fast paced environment of online business.

Swiss fintech Klarpay AG aims to bridge that gap. Founded in 2019, Klarpays’ vision is to create a nimble and modern all-in-one solution to empower digital businesses through, scalable, and API enabled corporate accounts and cross-border payment capabilities. Klarpay combines a digital first IBAN account with multi-currency global payment acceptance, and disbursement.

The Legacy Fallacy

For digital entrepreneurs to achieve results and create value in a rapidly modernising world, they need to understand the needs of new generations of users and test innovative business models. The conflict is that traditional banking institutions and innovative companies are not a match. Legacy banks are often characterised by bureaucratic and rigorous risk assessment processes that are often not adapted to modern-day online businesses. They often lack the latest technical infrastructure to provide online businesses with the embedded, interconnected, and frictionless payment and banking solutions they need to grow at a scale.

On the flip side, online businesses demand their banking partners to provide all services digitally and instantly through up-to-date technical integrations and protocols. Unfortunately, most legacy banks don’t have the malleable technical infrastructure in place to provide such solutions.

Unrestricted by rigid legacy systems, Klarpay’s key competitive advantage is a tech-forward approach to integrated transactional banking solutions designed for the digital era. One of the main ways in which Klarpay seeks to disrupt the incumbent banking industry is through accessible, forward-thinking, and fully integrated digital transactional banking solutions.

Regulation Matters

Another key differentiator for Klarpay has been its approach when it comes to regulation. In 2019, Klarpay became one of the first companies to secure a fintech deposit-taking licence under the Swiss Federal Banking Act Article 1B. Acquiring a deposit-taking licence by FINMA has enabled Klarpay to provide businesses with a comprehensive corporate accounts and payments service that includes everything from IBAN and virtual debit card issuance to global payment acceptance.

Klarpay’s authorization also grants the company a unique competitive advantage when it comes to cryptocurrency transactions, with Switzerland being one of the few countries in the world to define a clear regulatory framework on cryptocurrency acceptance. As open banking and Account-to-Account (A2A) payments become more mainstream, Klarpay’s merchant clients will be able to benefit from significantly lower costs and instant settlement on cryptocurrency transactions.

End-to-end Digital Transformation

As the financial world continues to evolve and consumers increasingly embrace new ways to pay online, digital businesses will require even more innovative, interoperable and omnichannel payment solutions. Klarpay is well-positioned to play an integral role in unlocking this friction around banking, payment, and disbursement solutions for digital businesses now and in the future.