Exclusive interview: Marc Evans, Klarpay COO for Virtual Banking

Even before the threat of the global pandemic, the seeds of virtual banking began to germinate due to the technological race of the past decades. From the development of broadband internet infrastructure to 5G and satellite internet access, the internet has changed how people work and merchants operate, giving rise to virtual banking.

But in addition to these technological advances, many other factors have driven the rise of virtual banking and how it differs from traditional banks.

Fintech News sat down with Marc Evans, Chief Operating Officer of Swiss-licensed fintech Klarpay AG, to discuss the company’s rise in virtual banking.

Marc Evans, COO, Klarpay

What is the story behind the company’s start-up, and what is your target market?

Experience has shown that traditional banks have not been able to fully understand and meet the changing needs of e-commerce. Despite their efforts to accommodate multiple use cases, increasing compliance requirements from regulatory authorities have made it quite unattractive for traditional banks to adapt their operations to fully serve e-commerce platforms.

Consequently, these banks’ approach will be to build in demanding control processes without fully understanding their customers’ business or simply refuse to include such businesses altogether, leaving them with no choice but to seek alternatives. In their quest for survival, these entities end up moving non-banks in less regulated jurisdictions down the ladder. As such, they spend more time maneuvering their banking solutions to adapt to regulatory and compliance requirements when they should be focusing on scaling their business.

At Klarpay, our mission is to solve the mismatch between the needs of modern companies and outdated systems and processes offered by traditional financial institutions by having a deeper understanding of our customers’ business models as well as addressing and managing risks directly. Our solutions are aimed at different companies, and our product offering is built to position online businesses for continued growth.

Virtual banking is often confused with internet or e-banking, which are two different concepts. Can you share your thoughts on this?

At first glance, the terms seem synonymous. However, the distinction can have a significant impact on the services offered. E-banking is an internet-based option offered by regular banks as part of their efforts to digitize the customer experience.

Customers can view their account balance, transaction history and send and receive money over the internet. The problem, however, is that these online portals are built on the bank’s older infrastructure, and it is a major task for these banks to modernize their underlying systems. I know of cases where banks embarked on changing or updating their core systems only to abandon these projects midway. The result is that the client is left with the same inefficient and limited experience.

A virtual bank has no physical branches and handles all transactions via the internet, email, ATMs and mobile check deposits. Meanwhile, in virtual banking, all transactions are handled online. In Klarpay’s case, our transaction banking services are offered using our proprietary systems that enable rapid customization.

What are the challenges facing the emerging e-commerce and fintech market in terms of payments, and how does Klarpay’s offering compare to traditional institutions?

Traditional banking institutions have yet to match the fast-paced nature of e-commerce today. As a result, their customers face payment reconciliation challenges and inefficient cross-border payment options that lead to problems and delays in processing transactions.

At Klarpay, we have tailored our products to solve these challenges. We understand that businesses without standardized payment solutions have incurred serious losses, lower customer retention and even sometimes faced legal liabilities.

With Klarpay’s virtual IBANs, companies can assign IBANs to individual customers or suppliers to simplify payment reconciliations, eliminate delays or confusion and improve the customer experience.

Similarly, Klarpay’s payment API is designed to integrate seamlessly into any e-commerce system, making it easy to pay employees, suppliers and customers. Businesses can also bring our solution into their own ecosystem, eliminating the need for back office staff to copy payment details, check payment statuses and match transactions between systems.

Our cross-border international payment options are optimized, enabling fast and secure global transfers in over 90 countries and 70+ currencies. Online businesses will also benefit from our virtual debit cards for online or in-store payments via Google Pay or Apple Pay.

Any expected launches of Klarpay?

Klarpay has recently expanded its international payment options by launching dedicated USD and GBP accounts. This add-on enables digital companies to collect and disburse USD and GBP payments globally through their Klarpay account. Our product roadmap extends into the future, with other significant releases planned. We are also improving our existing tools to improve customer experience and efficiency.

What is your opinion on the future of paytech and how is Klarpay preparing for it?

Paytech is developing rapidly. We have seen a monumental shift in consumer behavior and preferences, with transactions moving from offline to online and financial institutions and companies evolving from physical to virtual. From the progress we see today, it is clear that the future will be characterized by an omnichannel experience where customers can seamlessly switch between payment methods.

At Klarpay, we are familiar with the diversity of innovations in the payment area and their potential for our product offerings. While Klarpay is a new player in the industry, we are growing and developing quickly. Our strength lies in our agility and ability to develop solutions that ensure continuous business growth, sustainability and success for all stakeholders.