6 companies that drive the digital payments revolution

By Ionela Barbuta

The field of Internet Technology has been around for decades, but we are entering what the Harvard Business Review calls the Third Wave of IT Driven Competition. According to them, “IT is becoming an integral part of the product itself. Embedded sensors, processors, software, and connectivity in products (in effect, computers are being put inside products), coupled with a product cloud in which product data is stored and analyzed and some applications are run, are driving dramatic improvements in product functionality and performance.” While most businesses have yet (or are just getting ready) to take heed of these upcoming trends, a few have sprinted ahead of the pack, and are set to make huge gains with their forward thinking. Make sure you watch out for these companies in the future!

Digital Payments made Painless: Dwolla and Ripple Labs Inc.

When a company has been tapped by the United States Treasury as an official online transaction manager, then it’s obvious that the company in question is set to make a huge impact on the way digital payments are made. Considered by many as a disruptor in the financial services industry, Dwolla allows users to make and receive online payments without involving traditional banks and their fees. Currently available to both consumers and merchants, Dwolla is able to offer highly competitive fees with an infrastructure based around APIs, as well as potential future integration with a Form Builder tool, a shopping cart plug-in and invoicing options. What differentiates Dwolla from its competitors is its ability to allow users to verify banking information in a once off, simple process, without having to provide account or routing numbers. In an age where users demand the easiest way to complete a transaction without having to compromise on safety, Dwolla is set to be a leader.

Recently named in Fast Company’s annual Most Innovative Companies Issue as the world’s fourth Most Innovative Company in Money for 2015, Ripple Labs Inc. is another company aiming to make the online payment process quicker and easier. It is an internet protocol that allows funds to be transferred in real time. It can be used by banks and clearing houses alike as a form of settlement technology, allowing money to flow quickly and without extensive processing and reserve funding required. Ripple hopes to make its offering more mainstream by pairing up with the W3C Web Payment Interest Group to provide a better framework for the future of digital payments. The company hopes that this will result in more accessible standards, which in turn will foster a more competitive environment, with more efficient companies having better access in and across financial systems.

Business-to-Business Transactions: Tipalti and Armor Payments

The online business-to-business payment process is set to undergo several changes with the introduction of global payment platform Tipalti. Aiming to alleviate much of the red tape and paperwork that often accompanies business-to-business payments, Tipalti offers users the chance to manage VAT tax identification together with Single Euro Payments Area (SEPA) transactions. It also allows for better support for Automated Clearing House payments in over 32 countries, allowing businesses all over the world to make and receive verified payments. According to Tipati, a key value added differentiator between themselves and other companies providing similar services is their ability to provide a Global Payment Engine that uses five main banking groups and third-party payment providers to make payments, allowing Tipalti to make payments to all allowable countries on earth.

Another company hoping to revolutionize business-to-business payments is Armor Payments, an online-hosted escrow service that acts as a payment system for business-to-business e-commerce sites and e-marketplaces. Armor allows users to use the internet to access their software as hosted on vender’s servers. According to the company, such a service is in great demand, as it affords user security when making digital payments in advance to new suppliers. By acting as a trusted middleman, Armor allows the funds paid to be held until the buyer is satisfied that what they have paid for has been received in good order. In addition, Armor is also able to offer integration options to both partners and developers, due to its Representational State Transfer API and available software development kits.

Bringing Prepaid to the masses: HomePay and AstroPay

Even though digital payment technology will transform the way digital payments are made, not all markets will be transformed in the same way. Countries with less formal banking systems where currency is exchanged informally will require digital options that are able to integrate with their lifestyle. Companies such as HomePay and AstroPay are aiming to do just that. Currently based and operating in Singapore, HomePay offers users the opportunity to distribute their finances to family members via bank cards, using a mobile finance platform. Similarly, AstroPay, based in South America lets users order prepaid currency cards online which can then be paid for on delivery, or via a bank deposit.

Looking towards the Future

Many of the changes that are currently occurring in the online financial technology sector will continue to have lasting effects long into the future. The Internet of Things has long been brewing, and with it comes both opportunities and potential problems. The increased connectivity of internet applications across all platforms can offer companies more opportunities to create innovative financial technology solutions. It also brings with it heightened fears of privacy safety and security. It seems that the companies that are most likely to thrive in the financial technology sector are those who are able to heed this, and to hit the ground running. Companies such as Dwolla, Tipalti, Ripple Labs Inc., Armor Payments, and both HomePay and AstroPay can certainly be considered companies to watch!

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