From materials to contract work, companies use invoicing to pay for many of their major costs. Most still rely on solutions built on top of bank transfers or credit cards to handle cross-border payments, which usually takes 2-5 days to complete and represent a global market of $130 trillion,
enterprise payment startup Paysail The company says it has only raised seed funding to build a tool that shortens cross-border payment processing to less than five seconds. Its solution leverages stablecoins, which he describes as “Cryptocurrencies are designed to have a stable price because they are tied to a commodity or currency.”
According to Paysail, using stable coins to pay invoices also reduces transaction fees for businesses. Other startups in the space that use traditional banking infrastructure to make payments more efficient offer payments based on how fast and cheap they can be, as these are charged by intermediaries, especially Normally between countries that don’t regularly transact, Paysail cofounder Nicole Alonso told Nerdshala in an interview.
“There has been a lot of progress in making payments between the US and Canada, much cheaper and faster. But if you are sending payments from the US [a country in] Africa, it can still be really tough and cost exorbitant fees,” Alonso said.
The cost of making cross-border payments using older systems like Bill.com usually includes transaction fees charged by a third-party intermediary as well as currency exchange fees. In contrast, transfers made through Paysail only incur a “gas fee” that it takes to validate transactions on the blockchain, currently less than a tenth of a percent, Alonso said. .
Paysail is currently using Celo’s CUSD stablecoin, which tracks the price of the US dollar, to enable payments and plans to expand to other stablecoins backed by fiat currencies from various countries as it grows. Is. It is also evaluating a transaction fee of about 0.9% to generate revenue for the business, which Alonso said could be structured as a tiered offering and ideally based on each company’s transaction volume. At a price that will “significantly outweigh any existing competitors in the non-crypto space”.
The company today announced its $4 million seed round Led by Uncork Capital with support from Tribe Capital, Peer VC and Mischief Capital. Angel investor Nick Milanovic, head of business development and strategy at Google Pay, and Juan Manuel Fernandez Lobato, founder and CEO of Aubry, also participated in the round.
Current users of Paycel include “a small group” of companies, most of whom are already transacting in the cryptocurrency or are familiar with the space, Alonso co-founder Liam Brennan-Burke told Nerdshala. Brennan-Burke said the company wants to fine-tune its solution for crypto-native customers before expanding to customers who have no prior crypto experience.
Alonso and Brennan-Burke, who launched Paysail last year after meeting as students at Claremont McKenna College, are Paysail’s only full-time employees today. They plan to use their funding to hire a full-time engineering team as well as legal advisors and eventually a sales team.
Paysail is building out its technology to allow users who do not have an existing crypto wallet to initiate transactions on its platform by creating a non-custodial wallet on behalf of users through a third party wallet provider . Brennan-Burke said it aims to eventually bring this functionality in-house and add new features to the Paycel wallet, such as allowing users to earn yields on their stablecoin holdings. He added that in countries such as Nigeria, where local fiat currency depreciation poses a significant risk, companies may prefer to keep their funds in stablecoins for less volatile currencies and move it to local fiat on their own timelines.
“The goal with the platform is ultimately to make cryptocurrency payments really digestible and easy to use, and not so hard for businesses and individuals who have no prior experience with it,” Brennan-Burke said.