The international vision of Toronto-based company Payment Rails has placed company founders Tim Nixon and Ferhan Patel at the cusp of a new movement: fintech startups who see the opportunity in a worldwide customer base. TechPortfolio spoke to co-founder and CEO Tim Nixon about matching ambition with execution on the world fintech stage.
TechPortfolio: When starting a fintech company with an international vision, how do you begin to absorb and work within all the various financial regulations you’ll be dealing with?
Tim Nixon: Our long-term vision is to help business all around the world with their payout needs. However, right now we are primarily focusing on assisting Canadian and U.S. businesses. Our team has extensive experience in navigating financial, payments, AML and compliance rules and regulations, along with the support of experienced and respected advisors and partners.
Therefore, we were able to address these requirements really early on before we even started coding the platform. If I had some advice for other fintech startup founders, it is to understand exactly what is required of you from a regulatory point of view in all the markets you wish to serve and to have a plan to address those before you start building.
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TechPortfolio: How important were forming banking partnerships before the launch of Payment Rails? Was this difficult?
Tim Nixon: Working with banking partners and financial institutions is very important to building a global payments business. Fortunately, my co-founder Ferhan and I have almost 20 years’ combined experience in the payments industry. Over the years, we have built trusted relationships with some of the smartest and most influential payments, banking and compliance experts from around the world.
We are truly thankful to have the opportunity to work with many of these people through our new venture, Payment Rails. Within the next two to three years, I believe we will count over 150 financial and non-financial partners working closely with us to provide our next-generation payment infrastructure globally.
TechPortfolio: Is there a “typical” Payment Rails user? What sectors and countries look to be the most active adopters of your service?
Tim Nixon: Right now we are focusing on online marketplaces and platforms that need to pay on-demand workers. We believe very strongly in the future of the on-demand economy, and the millions of people who are deciding every day to start working for themselves as an independent contractor or “freelancer.” This transformation of how people work is truly amazing. There will be half a billion freelance workers worldwide within eight years, according to McKinsey. Almost any skill or service is now readily available from a global labour force, all connecting via online marketplaces and platforms.
In traditional workplaces, a company would turn to a local payroll provider, such as ADP, to pay its employees working in that country. However, new platforms and marketplaces suddenly have workers from 190+ countries to pay. And there aren’t good solutions available today to support their payout needs. This is where Payment Rails and our global mass payout API comes in.
There are many use cases for sending global business payments. We are really just scratching the surface of what is a $54 trillion opportunity. We have received strong interest from businesses in both Canada and the U.S., along with companies from Europe, Asia and Australia reaching out to us.
Frequently Asked Questions
What does Payment Rails do?
Payment Rails is a Toronto-based fintech company that offers a global mass payout API. As of January 2017 it focused on helping online marketplaces and platforms in Canada and the U.S. pay on-demand workers, with a long-term goal of serving businesses worldwide.
Who founded Payment Rails, and what experience did they bring?
Payment Rails was founded by Tim Nixon, its CEO, and Ferhan Patel. Nixon said the two had almost 20 years of combined experience in the payments industry and had built trusted relationships with payments, banking and compliance experts around the world.
How did Payment Rails approach financial regulation?
Tim Nixon said the team's experience with financial, payments, anti-money-laundering and compliance rules, plus experienced advisors, let them address regulatory requirements before they started coding. He advised founders to understand what each target market requires and plan for it before building.
Why do online marketplaces need a service like Payment Rails?
Tim Nixon explained that traditional companies use a local payroll provider to pay employees in one country, but new platforms may have workers in more than 190 countries to pay. He said good solutions for those payout needs did not exist, which is where Payment Rails fits.
How large did Payment Rails see its opportunity being?
Tim Nixon cited a McKinsey estimate of half a billion freelance workers worldwide within eight years and called global business payments a $54 trillion opportunity. In 2017 he expected Payment Rails to have more than 150 financial and non-financial partners within two to three years.