Podcast January 28, 2020

VoPay created real-time bank payments for Canada (and they’re coming to the USA)

Credit cards offer the convenience of real-time processing, high visibility, and traceability through the entire transaction life cycle. That’s the good news with credit cards.

The bad news? Credit card transaction fees are expensive for the merchant, and interest rates can often be crushing for the consumer.

But what if you could take all the benefits of credit card transactions and duplicate them in bank-to-bank transactions?

If you could do that, you may be called VoPay

VoPay is a Payments Innovation that is “digitizing online bank account payments for all.” 

We invited VoPay’s CEO, 3-time Founder Hamed Arbabi, onto our podcast to share their exciting platform that’s transforming the payments landscape in Canada. (And it’s coming to the United States!)

Hamed saw the banking industry was ready for rapid payment processing

Before VoPay, Hamed founded a company that focused on telecom, wholesale voiceover IT services, onboarding, and mobile operators. That venue grew to $4 billion in sales in less than 6 years, until it was acquired in 2011. 

Hamed saw similarities between the telecom space and the banking space. In a nutshell? The need for speed was consuming the financial industry, and solutions were needed. 

Businesses needed a way to send and receive payments quickly, with high visibility. Plus, they needed to trace payments through the entire transaction life cycle. 

Of course, Hamed wasn’t the only one to notice these pain points — other fintechs and startups have also tried addressing these issues, but most of those solutions are built on plastic, using credit card processing as their foundation. But here’s the problem with using plastic as the foundation for a payments solution (other than the high fees):

80% of business transactions in Canada are still completed using bank account payments.

So, Hamed wanted to solve the underlying issue — bank-to-bank transactions were too slow. 

80% of business transactions still go through bank accounts (& they’re invisible).

Of course, besides the speed of reconciling the payment, credit card usage also solved the other issues, like visibility.

Traditionally, payments made from bank accounts are difficult to trace through the transaction process. Currently, banks are offering tracking solutions through legacy software. Usually, this is a labor-intensive process, requiring manual updates from the moment a transaction is submitted, until it’s completion, and every step along the way. It’s a long, involved process.

With VoPay’s digital platform, the entire transaction lifecycle is transparent and updated in real-time. 

VoPay instantly ensures funds availability

One way VoPay’s system really benefits the merchant is by ensuring funds availability (via data point verification) at the time of transaction. This eliminates the NSF (non-sufficient funds) issue with using bank accounts. No more accepting a check only to find out that funds aren’t available. 

Of course, VoPay has so far focused their solution in Canada. But don’t worry — they have expansion plans. Next stop, USA. 

The similarities between EFT in Canada & ACH in the US 

Within the first 18 months, Hamed’s team plans to expand into the US markets. While some regulations and traditional systems are different, Hamed knows there are many similarities (and challenges) within the US and Canadian financial industry.

On the technical side, Hamed noted that the USA’s ACH system — the backbone of bank account payment transactions — is highly similar to Canada’s EFT foundation. 

1 more differentiator: VoPay’s product is built on customer feedback

Quick note here: I’ve seen tech products built on ingenious ideas and lofty ideals, but fail in the market. Without the end customer in mind, a genius idea launches, but has no place to land. 

Hamed refreshingly relayed to me that, at VoPay, they differentiate themselves by utilizing a heavily customer-focused product development team. He said they constantly receive feedback from their customers, evaluate the feedback, and then determine if and how that feedback can improve their product.

To find out more about VoPay

While Hamed says they will stay relentlessly focused on their core product — bank account payment processing — they are actively building strategic partnership that allow them to break into new markets.

To find out more about VoPay, email them at business@vopay.com

To ensure that you never miss an episode of Payments Innovation, subscribe on Apple Podcasts, or Spotify, or here

Until next time!

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