Paysail: Faster B2B Payments with Crypto

Streamlining Business Payments with Stablecoins

Many businesses utilize invoices for settling substantial expenses, encompassing everything from raw materials to contracted services. Currently, the majority continue to depend on payment methods built around traditional bank transfers and credit cards for international transactions.

These conventional cross-border payments typically require between two and five days for completion and collectively constitute a $130 trillion global market.

Paysail: A New Approach to Cross-Border Transactions

Enterprise payment solutions provider, Paysail, has recently secured seed funding to develop a system designed to drastically reduce cross-border payment processing times to under five seconds. This is achieved through the implementation of stablecoins.

Paysail defines stablecoins as “cryptocurrencies engineered to maintain a consistent value by being linked to a commodity or a conventional currency.”

Leveraging stablecoins for invoice payments also serves to lower transaction costs for companies by eliminating the need for intermediary financial institutions. According to Paysail, other startups focused on improving payment efficiency through existing banking systems are facing limitations.

These limitations stem from the fees imposed by intermediaries, especially in transactions between countries with infrequent financial interactions, as explained by Paysail co-founder Nicole Alonso in a TechCrunch interview.

Alonso stated, “Significant progress has been made in reducing the cost and time associated with payments between, for example, the U.S. and Canada. However, sending a payment from the U.S. to a nation in Africa can still be exceptionally challenging and incur substantial fees.”

Cost Comparison: Traditional vs. Paysail

The expense of a cross-border payment using established systems, such as Bill.com, generally includes both a transaction fee levied by the intermediary and a currency conversion charge.

Conversely, a transfer facilitated by Paysail incurs only a “gas fee” – the cost of validating the transaction on the blockchain, which currently amounts to less than one-tenth of a cent, according to Alonso.

Future Expansion and Revenue Model

Paysail is presently utilizing Celo’s CUSD stablecoin, which mirrors the value of the U.S. dollar, to facilitate payments. The company intends to broaden its support to encompass additional stablecoins tied to the currencies of various countries as it expands.

They are also considering implementing a transaction fee of approximately 0.9% to generate revenue, potentially structured as a tiered system based on transaction volume, aiming to “significantly undercut any existing competitors in the non-crypto space” in terms of pricing.

Seed Funding and Investors

The company announced a $4 million seed funding round today, led by Uncork Capital, with contributions from Tribe Capital, Pear VC, and Mischief Capital.

Angel investors Nik Milanović, head of business development and strategy at Google Pay, and Juan Manuel Fernández Lobato, founder and CEO of Ebury, also participated in this funding round.

Current User Base and Future Growth

Paysail’s current user base consists of “a small cohort” of companies, many of whom are already engaged in cryptocurrency transactions or possess familiarity with the technology, as stated by Alonso and co-founder Liam Brennan-Burke.

The company plans to refine its solution for customers already utilizing cryptocurrency before extending its services to those without prior experience, Brennan-Burke added.

Team and Development Plans

Alonso and Brennan-Burke, who initiated Paysail after connecting as students at Claremont McKenna College last year, are currently the company’s sole full-time employees.

They intend to allocate the funding towards building a dedicated engineering team, securing legal counsel, and eventually establishing a sales team.

Wallet Integration and Long-Term Vision

Paysail is developing functionality to enable users without existing crypto wallets to transact on its platform by generating noncustodial wallets through a third-party provider.

The company aims to eventually internalize this functionality and introduce additional features within the Paysail wallet, such as allowing users to earn yield on their stablecoin holdings, Brennan-Burke explained.

In countries like Nigeria, where currency devaluation is a concern, businesses may prefer to hold assets in stablecoins and convert them to local currency as needed, he noted.

Brennan-Burke concluded, “The ultimate goal is to make cryptocurrency payments accessible and straightforward, removing the intimidation factor for businesses and individuals unfamiliar with the technology.”