Exciting articles several times a month
16 August 2017
Looking at the rise of a fintech startup at its early dawn is an exciting and unparalleled experience and feeling, and very much so if you have a chance and honor to talk to its founders in the first flight. Today we publish an exciting story of SoTec, an emerging forward-looking company starting its path in the fintech world, kindly provided to us by its CEO Seweryn Bidolach and co-founder Phani Pasupula.
Could you, please, briefly introduce your company? What your business is all about?
We are an early stage startup that provides payment card solutions to manage and simplify organisation’s funding and expenses. Our solution provides increased internal transparency through micropayments and automated expense reporting by utilizing virtual and physical prepaid debit cards on top of the award winning, low cost, open payment cloud platform.
You have entered the fintech sector to work with charity and non-for-profit organizations. Why charity? How this idea came to you?
Our product developed from earlier work at hackathons where we had a goal to create a solution to improve transparency, efficiency and accountability with charities. We won two hackathons by progressing this concept using different technologies. In the first win, we used prepaid cards to build more transparency and trust between donors and charities. The idea was to give full transparency for donors into transaction history which could increase their engagement.
In the second hackathon, we focused on utilizing blockchain technology and cryptocurrencies to achieve a similar objective. This solution allows minimizing fees and costs between the donor and the supplier with full control by the charity. After our hackathon experiences we realized the same transparency and cost issues exists within commercial organizations. By creating a generalized platform with a charity focus at its core we hope the commercialization opportunities will subsidize the platform development.
What payment products and services do you offer? Could you provide more details?
Our vision is to deliver a full lifecycle payment card solution for commercial and charitable organisations. Through the platform companies can immediately create and fund virtual payment cards while more traditional companies can utilize plastic payment cards with the same immediate funding and top up capabilities.
As funds are spent through these cards the platform will provide full visibility on expenditures to selected stakeholders. Companies have full control over their money but with even greater flexibility with more efficient options for disbursement. All our transactions are processed in real-time so access to transaction history is straightforward and immediate.
We are initially focusing on virtual cards to deliver the most flexible and simple solution to distribute cards around employees allowing better control over spending. This solution enables companies and charities to quickly understand spending patterns and help them identify saving.
Our mobile application will automate and simplify expense reports. The user of the mobile app can easily take a picture of the receipt at the time of payment significantly reducing user hassle compared to traditional expense reimbursement processes. This can be quickly integrated with existing accounting software and in just a few clicks the end user or organisation can generate a full financial report.
Do you have any competitors in the market and what are your advantages over them?
Our competitors are mostly in a fledgling state, like us. This is an entirely new space which is partly being driven by need, partly by regulation, and partly by the success of similar efforts in other markets – imagine what happened when Apple Store and Google Play started allowing mobile phone apps. There was an explosion in that market. We’re seeing a similar effect in the payments space. The analytic data shows that card payment increasing from one year to another so we would like to use this trend and provide a solution which will be customized to market requirements. We believe that our price model and quality will be strongly competitive to our competitors.
What an organization needs to do to subscribe to your services? Do they need any hardware or software?
SoTec is designed to be very lightweight for our clients. All you need is an Internet browser – you could even use our solution on a tablet or smartphone. In near future, we want to release a native mobile app which should be more user-friendly on mobile devices.
The subscription process is very simple. Your business can be onboarded on our platform within a few hours. Just like most financial institutions, we require questionnaire with basic information about company and two documents which confirm your identity and address.
How do you process payments? Are you partnering with some banks?
We’re building our application on the Open Payments Cloud, a payment solution provider. The payment provider essentially gives us a layer to integrate with all of the banks, card issuers and other service providers connected on the back side. It gives us flexibility without the overhead of risk and compliance management – which is all handled by the platform.
Do you have some special permits or licenses for your activity? Are you regulated by authorities?
There are Compliance requirements that we need to satisfy to operate, even using an abstracted platform. Likewise, our clients will need to submit some Compliance paperwork to demonstrate that they are genuine companies and charities. The system doesn’t allow anyone to bypass the normal money laundering or anti-terrorism measures in-effect.
What security measures do you take to protect your customers against identity theft and fraud?
Part of the value of this platform is that the transaction monitoring and alerting is done by a company that has a significant amount of experience in that area. Even a very small startup can launch an innovative app without needing to worry about staffing a monitoring team 24×7 – that’s provided by the platform.
What countries are your target markets? What challenges do you face there?
Because we’re based in the UK, that’s an obvious starting point. There are a huge number of companies in our target market that we feel could really benefit from the flexibility and control our application provides. Like any startup, though, it’s going to come down to getting our value proposition in front of them and demonstrating the application. That will take time; we’re expecting that the results of the September Pilot that we are running will give us some hard evidence to show that the system really delivers the chain of accountability that we’re talking about.
Where do you see your company in a short-term and in a long-term?
Well, in short-term we are running a month-long Pilot in September to conduct transactions end-to-end with some actual charities and companies. We’ll absorb the lessons learned to refine the system and hopefully will have the system completely live before the end of the year. In long-term we’d like to be a leader in mobile payments and provide a donor-through-recipient payment solution for charities worldwide…but one step at a time.
Exciting articles several times a month