Bridging the gap between online business and transaction banking

As the global economy shifts towards an interconnected future, digitization continues to transform the world of transactional banking. Fintechs often outperform traditional banking institutions in serving the fast-paced environment of online business.

Swiss fintech Klarpay AG aims to bridge this gap. Klarpays was founded in 2019 and aims to create a flexible and modern all-in-one solution to strengthen digital businesses through scalable and API-enabled business accounts and cross-border payment options. Klarpay combines a digital first IBAN account with global payment acceptance and payout in several currencies.

The hereditary defect

For digital entrepreneurs to achieve results and create value in a rapidly modernizing world, they must 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. Older banks are often characterized by bureaucratic and strict risk assessment processes that are often not adapted to today’s 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 scale.

On the flip side, online businesses require their banking partners to deliver all services digitally and instantly through up-to-date technical integrations and protocols. Unfortunately, most legacy banks do not have the malleable technical infrastructure in place to offer such solutions.

Unconstrained by rigid legacy systems, Klarpay’s key competitive advantage is a technological approach to integrated transaction banking solutions designed for the digital era. One of the most important ways in which Klarpay attempts to disrupt the established banking industry is through accessible, forward-looking and fully integrated digital transaction banking solutions.

Regulation is important

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

Klarpay’s authorization also gives the company a unique competitive advantage when it comes to cryptocurrency transactions, where Switzerland is one of the few countries in the world that defines a clear regulatory framework for the acceptance of cryptocurrency. As open banking and account-to-account (A2A) payments become more mainstream, Klarpay’s merchant customers will be able to benefit from significantly lower costs and instant settlement of 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 demand 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.