Online payments start-up Clear2Pay secures EUR1.8 million funding

Online payments start-up Clear2Pay secures EUR1.8 million funding

Clear2Pay, a Belgium-based vendor of online payments software for financial institutions, has secured early stage funding of EUR1.8 million from venture capitalist Big Bang Ventures and a consortium of employees.

The chairman and CEO of the new company is Michel Akkermans, former chairman of S1 Corporation. The company’s co-founder is Jurgen Ingels, an investment manager at one of Europe’s largest banks, and the inventor of the Clear2Pay clearing and settlement system.

Akkermans says the company will use the new funding to develop a full-blown version of its technology, with input from financial institutions and payments processors. Early applications of the technology will provide Internet-based electronic payments with related netting and settlement functions within major financial institutions and banking consortia, he says.

“There is a maturing global need to reduce the cost and complexity of making payments," adds Akkermans. “Today we are seeing considerable convergence in the technologies, networks and protocols used to deliver payments online. The time is ripe to offer financial institutions dedicated technology and expertise to deliver payments services on the Internet.”

According to research firm Tower Group, banks worldwide spend nearly $10.8 billion on technology for payments processing each year. Further research in the area, by BancBoston Robertson Stephens, estimates that banks spend five times more on introducing Internet payments than other players – e-commerce companies, technology vendors and ‘disintermediators’ – combined.

The Clear2Pay platform is bank-centric and will aim to address numerous customer segments, including: business-to-business applications such as bill presentment, and integration with e-commerce exchanges and trading protocols; business-to-consumer payments, via integration with shopping cart, micropayment and ‘paybutton’ technologies; and retail payments, based on Web and e-mail applications. It is multi-currency and multi-lingual and supports emerging protocols and standards in the electronic payments arena, including Iban, XML and Swift formats.

Akkermans forecasts a significant market opportunity for Internet payments technology following the European Parliament’s 15 November decision to oblige banks to reduce cross-border payments to the level of a domestic transfer.

“The European Parliament's decision is interesting in that it effectively forces banks to move much, much faster down a track where they were already heading,” he says. “The Target, Euro 1 and Step 1 systems have already done much to improve the way high value transactions are managed within the Eurozone. The use of widely-available technology to encourage smoother, end-to-end processing of payments – the Internet being the best example – is a natural progression.”

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