Optimising payment processes means reducing the complex to the critical.
By FF Newsroom · 6 June 2017
The use of cards as a payment method has been in swing since the 1880’s, when the first credit voucher was introduced in the UK by Provident Clothing Group. Over the next 137 years the concept and use of a card as a means of payment has changed dramatically. One thing which hadn’t changed, until now, is the necessity of a physical card. While in recent years there has been a revolution in the ways of banking, the physical card hadn’t evolved beyond needing a physical embodiment. This has now changed with Optal who have developed their own virtual card. With everything moving further into the void of digitalism the inevitability of virtual cards was transparent.
All this started to come into being during the early 2000s when Optal, in partnership with Travelport, founded eNett who went on to offer Virtual Account Numbers (VAN). Simply put, this payment solution automatically generates single-use MasterCard numbers to help payments across the MasterCard processing network. The use of this network allows acceptance of the card at 35 million locations across the globe. Through this innovation and the collaboration with MasterCard, Optal, has succeeded in ascending the FT1000 list of Europe’s 1,000 fastest growing companies to seventh place.
Rob Bishop, Managing Director at Optal explains their success; “a lot of issuers have to put up security to cover their settlement risk. We built a new model that doesn't require collateral, so all of those things that are important when you grow are trying to cover a low cost model.”
Besides being the next step in a digital evolution for payments the use of this technology comes with a variety of benefits for businesses and individuals alike. The greatest advantage is the reduction in risk, predominantly for travel buyers and providers. The majority of agencies process and reconcile payments manually, costing approximately $1.5 billion annually along with wasting a considerable amount of time. What VANs enables are safer and dynamic payments. Using VANs provides a number of benefits including improved reconciliation through automation and integration with booking tools, rebates ,which are provided every time a payment is processed, and a lower cost foreign exchange. These features help save businesses the precious time and money they were originally wasting.
The current standing of eNett has a reach of 34 currencies over 80 countries already making it the largest virtual card provider. Within this global network the dominant focus for the company was focusing on the travel space. However, their success has helped fuel their ambition and in doing so Optal are now looking to venture outside travel and into other areas which could benefit.
Bishop clarified this by adding: “as we got more ways to push money around the world, we began to look at blockchain, not something we will be a champion of, but will stay close to, because it gives an opportunity to be faster and smarter when pushing money all round the world. Our role is to be an intelligent user of all these new technologies such as blockchain.” Amidst the surge in value of the cryptocurrency BitCoin, which currently stands at £1723, that is commonly associated with blockchain technologies, it is likely that businesses and individuals will see an uptake of investments in the technology, thereby allowing more research being conducted to find out its limits.
Through their continued expansion, in March of this year, Optal successfully acquired Invapay, a B2B payments platform who facilitate suppliers to be paid which have traditionally not accepted card payments. The procurement of Invapay will grant Optal the ability to pay anyone, anywhere. Another enhancement this addition has unlocked is the “ability to pay at an ETF level, outside virtual, expanding into the broader B2B payments space” states Bishop.
The CEO of Optal is quoted in saying; “the acquisition of Invapay enables Optal to deliver a ‘one-stop-shop’ for corporate B2B payables needs. When combined with our existing highly successful virtual payment solutions including virtual account numbers or VANs, Invapay completes our product offering.”
On the other side of the business coin, Sid Vasili, CEO of Invapay had this to say: “This transaction will ensure that the Invapay business has the resources and capabilities to meet our global growth aspirations. People talk about 'procure to pay' but no one really manages the 'pay' part very effectively. The team at Optal share our vision for solving that problem."
While the future for the company remains to be seen in detail, Bishop states that, for Optal, they will be looking for new ventures outside the travel space and into less understood technologies such as blockchain to unlock the true potential of payments. By searching for new ways to develop and innovate payment solutions, to meet the many specialised needs of industries, can risk be reduced and time saved.