The pre-launch firm has spent the final two years constructing what it describes as a “cloud-native” on-line card processor that straight connects to card networks. The intention is to supply a contemporary alternative for the 20 to 40-year-old funds card processing tech that’s largely in use at the moment.
Backing Silverflow’s €2.6 million seed spherical is U.Okay.-based VC Crane Enterprise Companions, with participation from Inkef Capital and unnamed angel traders and trade leaders from Pay.On, First Knowledge, Reserving.com and Adyen. It brings the fintech startup’s whole funding to this point to ~€three million.
Bootstrapped whereas in growth and launching in 2021, Silverflow’s founders are CEO Anne-Willem de Vries (who was targeted on card buying and processing at Adyen), CBDO Robert Kraal (former Adyen COO and EVP international card buying & processing of Adyen) and CTO Paul Shopping for (founding father of acquired translation startup Livewords).
“The funds tech stack wants an improve,” Kraal tells me. “As we speak’s card fee infrastructure primarily based on 30 to 40-year-old expertise remains to be in use throughout the worldwide fee panorama. This legacy infrastructure is costing everybody money and time: shoppers, retailers, payment-service-providers and banks. The legacy platforms require a prolonged on-boarding course of and are costly to take care of, [and] additionally they aren’t match for objective at the moment as a result of they don’t assist knowledge use”.
As well as, Kraal says that including new performance is a prolonged and costly course of, requiring the trouble of specialized engineers which finally slows down innovation “for the entire card funds system”.
“Lastly, each acquirer supplies its buyer with a special processing platform, which for a typical fee service supplier (PSP) means they should cope with a number of legacy platforms — and all the prices and specialised assist every entails,” provides de Vries.
To unravel this, Silverflow claims it has constructed the primary funds processor with a “cloud-native platform” constructed for at the moment’s expertise stack. This consists of providing easy APIs and “streamlined knowledge flows” straight built-in into the cardboard networks.
Continues de Vries: “As a substitute of managing a fancy community of acquirers throughout markets with dozens of financial institution and card community connections to take care of, Silverflow supplies card-acquiring processing as a service that connects to card networks straight by means of a easy API”.
Goal prospects are PSPs, acquirers and “international top-market retailers” which might be seeing €500 million to 10 billion in annual transactions.
“As a managed service, Silverflow supplies the upkeep for connections and new product innovation that customers have usually needed to assist in-house or work on long-term product street maps with suppliers,” explains Kraal. “Based mostly within the cloud, Silverflow is infinitely scalable for peak flows and likewise supplies sturdy knowledge insights that customers haven’t beforehand been in a position to entry”.
Almost about opponents, Kraal says there aren’t any different firms in the intervening time doing one thing related, “so far as we’re conscious”. At present, acquirers use conventional third-party processors, similar to SIA, Omnipay, Cybersource or MIGS. Some firms, like Adyen, have constructed their very own in-house processing platform.
So, why hasn’t a cloud-native card processing platform like Silverflow been finished earlier than and why now? A lack of expertise of the issue could be one purpose, says de Vries.
“Until you have got constructed a number of integrations to acquirers throughout your profession, you aren’t conscious that the 30 to 40-years-old infrastructure remains to be in use. This isn’t usually an issue some vivid school graduates would deal with,” he posits.
“Second, to construct this efficiently, you’ll want to have prior data of the cardboard funds trade to navigate all of the authorized, regulatory and technical necessities.
“Thirdly, any massive company at present lively in card fee processing will pay attention to the issue and have the related trade data. Nonetheless, constructing a brand new processing platform would require them to allocate their most proficient employees to this mission for two-three years, taking away sources from their present tasks. As well as, they’d additionally have to handle a fancy migration mission to maneuver their present prospects from their present system to the brand new one and danger shedding a few of the prospects alongside the best way”.