When money transfer app Payfriendz was launched in 2013, its founders soon discovered that the electronic payments industry is mired with complex regulatory and compliance requirements. Finding that there was no one-size-fits-all company offering a solution, the team created their own platform – Paybase – designed to take the stress out of compliance for ecommerce SMEs.
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Speaking with Techworld, Anna Tsyupko, CEO of Paybase says the platform is designed to remove the various regulatory strains on ecommerce providers.
"The idea of Paybase and the platform is to take away this burden of getting regulated for many providers and constantly being covered by numbers and authority behind payments, and just make it easier for our partners, allowing them to focus on their core value proposition while knowing that Paybase can support them," Tsyupko explains.
"We're trying to use the best of technology to improve the infrastructure to change these payment rails and support fintech companies with interest in payment who want to leverage these payments to innovate.
"We are using the same technologies used by the likes of Facebook, Netflix and Paypal, they've been tested by the big guys out there, which means there's a lot of room for scalability, which is one of our primary concerns both small as they grow."
Tsyupko founded Paybase in 2016, when the company began working on an end-to-end solution epayment solution with a complementary API to help customers integrate the platform quickly and easily. The platform has not yet been launched, but has received £700,000 in funding from Britain's innovation agency Innovate UK as well as private investors.
Tsyupko believes that the term fintech has typically referred to B2C consumer-facing businesses – for example, challenger banks – but the work to be done on the infrastructure side is where Paybase can fit in.
"I think that in the past few years the word fintech has largely been used to describe consumer-facing companies and that's great, but I see that there is a lot to be done in the B2B fintech space as well because the infrastructure is quite antiquated and that is what we're trying to change," she says.
More recently, Paybase added a ‘logic engine' to its platform to provide real-time transaction visibility.
"What we've done is added a so-called logic engine to our ledger and what this does is it can run rules before and after transaction happens," she says. "The critical thing is that the rules that happen before transaction can actually influence this transaction in real-time.
"So unlike other processor or ledger rules that react after, our rules can see the transaction in real-time and they can flag a transaction in real-time, and that's great for fraud prevention and risk management."
"Another interesting thing is the after-transaction laws - this could for example be to notify someone if their merchant has received more than 10 transactions in the first week after being signed up as a merchant," Tsyupko says. "They can then receive a notification through an API call to the account.
"All of this is to give our partners insight on what they haven't had before, so all of a sudden payments are not just this cumbersome thing that you have to work and build your products around, but instead payments become something that can make it better."
For its backend, Paybase tends towards using open source technologies over proprietary vendors to avoid lock-in and makes use of container software like Kubernetes. The CEO tells Techworld Paybase is also trialling machine learning for detecting fraud patterns, and uses a graph database for its modelling.
"The way we model our data is not in a basic database because the drawback of that kind of database is if two customers end up having the same address that would not be instantly visible to us, we'd have to go through a lot of data to find it so we're modelling things using a graph database," Tsyupko explains.
"Having that visibility is fantastic for risk management and fraud prevention because I can see how things fit together," she adds.