The founders of fintech startup, Cambrist, Jacob Claflin, Blake Newman and Victor Mikhailov are men on a mission. They say that traditional debit and credit cards have worked the same way for over 60 years and that the sector is ripe for disruption.
In particular the founders want to drive a sea change in how international consumer payments are made. To this end they have developed a cloud-based foreign currency exchange processing engine to make it happen.
“Our aim is to connect two worlds that currently operate separately: consumer payments and the wholesale foreign exchange market. By bringing them together, consumers will get more value and banks can increase their revenue,” Jacob Claflin explains.
“Today the foreign exchange (Fx) rates applied to international payments, whether made using a mobile wallet or credit, debit, or prepaid card are generally 1-2 per cent higher than the rates available on the wholesale Fx markets. By deploying our platform, which is directly connected to multiple wholesale Fx market makers, we can become the bridge that connects incremental consumer payments to the wholesale Fx market in real-time.”
The three founders have spent most of their careers in the payments industry. CEO Claflin has over 18 years experience in payments and processing for both startup and publicly traded companies. Head of product Blake Newman, has expertise in the design and implementation of large B2B multi-currency prepaid travel card solutions and CTO Victor Mikhailov is experienced in the design and development of multi-currency payment card processing platforms.
Cambrist was formed at the beginning of 2016. By October the company had raised initial funding and secured its first pilot client. A second funding round is due to close in the New Year. The company expects to hire six people in 2017.
Claflin says it was a toss up whether to base the company in Dublin or London. Dublin won because of its good startup infrastructure and the Brexit vote has made the decision seem even better. However Claflin says the one area where support was lacking was in very early-stage funding. As a result the founders had to tap into their overseas network of payments industry veterans to find angel investors.
“The idea for Cambrist came about through my frustration with the fact that my standard bank cards didn’t (and couldn’t) offer me the advanced Fx payments available in the prepaid travel card sector,” Claflin says.
“Around 2015 I began evaluating how the advanced, real-time foreign currency services available in the prepaid world could be applied to more traditional bank debit and credit cards. Multi-currency prepaid travel cards have disrupted the international payments space over the last few years. However, prepaid cards are still niche. By and large, consumers still prefer to pay in cash or use their typical bank debit or credit cards when travelling even though the rates are very high.
“Our platform enables our bank and processing partners to be in control of the Fx rates applied to their consumer payment products. Ultimately, our partners get to decide whether to pass our wholesale Fx rates on to their cardholders to make consumer spending 1- 2 per cent cheaper while abroad. Alternatively the banks can use our services to improve their own margins and revenue while keeping their cardholder costs the same,” says Claflin.
Cambrist’s product is called Issuer Dynamic Currency Conversion and its principal buyers will be banks, payments processors and those involved in prepaid cards. The service is designed for global use and has already attracted interest in the Czech Republic, Slovakia, Poland and Scandinavia.
Startup costs have been in the order of €200,000 to get the platform into beta and the company’s first pilot will go live in early 2017 with an Irish fintech partner.