NanoPay Raises $10 Million to Simplify Business-to-Business Payments

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Toronto-based nanoPay has raised $10 million (CAD) in venture capital to help fund its expansion in the business-to-business payments market.

“We’re very excited about it,” says Kent Rawlings, nanoPay’s chief commercial officer. “It’s a vote of confidence in the technology platform that we acquired, and the investors clearly see the potential applications for this technology in a broad range of use-cases.”

In January, nanoPay announced that it had acquired MintChip, a digital currency technology that allows for cash transfers directly between digital wallets, from the Royal Canadian Mint.

Rawlings says the Series A investment round, which included participation by the Merchant Banking Division of Goldman Sachs, gives nanoPay the financial stability to pursue its goals.

“Specifically, it gives us money to pursue specific use-cases a little bit deeper, and gives us some runway to grow those use-cases out,” he says.

MintChip was originally developed by the Mint to enable consumer and peer-to-peer payments.

It’s an area that nanoPay has experimented with, particularly in Toronto’s Liberty Village neighborhood where a number of merchants accept MintChip.

But Rawlings says that consumer payments won’t be the company’s main focus in the near future.

Instead, it plans to focus on business-to-business payments.

“The real value in the technology is the actual transaction engine that is capable of doing any type of transaction,” Rawlings says.

Because payments made on the platform reconcile in real time, he says, there’s less complexity for businesses, reducing the cost of processing transactions.

“There’s huge savings opportunities, as well as just the pure efficiency of being able to complete transactions in real-time,” he says.

For transactions that cross international boarders, that real-time transfer also eliminates the risk that currency exchange rates will change in the time between when the payment was sent and when it is reconciled.

He says the company is already putting this into practice with a bank that has branches in 26 countries.

The technology behind MintChip takes a different approach from most payments platforms,  Rawlings says.

While most platforms focus on protecting endpoints, the MintChip platform “really protects the package of the information,” he says.

Because the information itself is highly secure, he says, how the information is transported doesn’t matter.

That reduces costs and allows for the platform to be used to send almost any amount of money, he says, anything from less than a cent to tens of millions of dollars.

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