Exclusive interview with ONPEX: "we offer what banks offer – through simple APIs"

How does ONPEX position itself in the open banking and payment ecosystems and what customer segments do you serve?

We provide a modular platform with full banking functionalities and offer this as Banking-as-a-Service to our clients. The functionalities include everything that you normally expect from banks, like issuing IBAN accounts, local and cross-border transfers like SEPA and SWIFT, handling 25 currencies, managing cash, payment flows and foreign exchange in one centralised place powered by API-driven technology. Our aim is to enable simplicity, transparency, and automation in payments and banking.

What is our approach to open banking? We offer what banks offer – through simple APIs. Our client groups are regulated financial institutions and non-regulated corporates. For financial institutions, such as payment institutions, e-money issuers, or even fully regulated banks, we help them structure their payment flows or design their own banking or financial services. This could be either an e-wallet provider that wants to make his e-wallets bankable or a card issuer who wishes to add an IBAN to every card that he issues. With regards to banks, their legacy core systems are mostly linear, which means this does not allow them to build structures relevant for providing solutions to marketplaces or PSPs. Therefore, we have banks approaching us to use our white-label system in their name to set up account structures and handle payments on behalf of their clients and their clients’ clients. Our non-regulated clients, like marketplaces or resellers, use our compliance setup and license services to collect and distribute payments under a regulated umbrella. They are also enabled to create their own financial services as we mainly operate in the back-end offering of the whole engine, the platform, the regulation, the infrastructure, and the clearing services.

How can businesses and banks benefit from a collaboration with ONPEX?

Businesses benefit from our vast IBAN issuing capacities. Let’s take a phone service provider. In order to avoid reconciliation issues with invoice payments and numbers, they could give every customer an IBAN for directly reflecting the customer’s balance with the phone service provider.

Another benefit: Real-time transfers. Large multinational conglomerates, for example, are enabled to make cross-border payments with ONPEX accounts within seconds. One of our clients operates in Alipay settlements; we receive these incoming funds, which are normally sent out of Hong Kong and they clear same day with us. This means that the Alipay Payment-Service- Provider can then settle within minutes towards their merchants.

We do not only supply IBANs, we also add multi-currency capability integrated into our Banking-as-a-Service. A great benefit is that all these processes can run in the back-end, behind any kind of online banking management or app front-ends and it can be used through the APIs.

Could you give an example of a customer success story?

We have many fund collection services. For example, Amazon sellers that receive payments through ONPEX accounts opened in the name of their marketplace participants, have access through an online banking interface and can directly pay their vendors or transfer these funds into their regular business accounts wherever they are – China, Hong Kong, and so on.

We also collaborate with a large FX service provider. This provider is using Goldman Sachs as their liquidity pool, but for incoming and outgoing transactions, they use our IBANs and payments capabilities. Their clients do the wires into ONPEX accounts in the name of the FX provider and, subsequently, the FX provider pays out the respective clients. In between all the cash transfers, the large volume transfers between Goldman Sachs and the FX provider is handled on our platform. It’s all about the same product: IBAN accounts with multi-currency support and API accessibility that can help every business accelerate.

What are your PSD2 compliance and KYC/AML strategies and how do they differ from what is now on the market? 

In regards to PSD2, we are fully compliant, including two factor authentication, access to accounts and so on. Our regulator CSSF has re-authorised ONPEX under PSD2.

Concerning RTS of PSD2, these are rather framework standards, not technical ones. In the process of developing our platform, we already anticipated these standards and implemented Access to Accounts as a feature, all while the industry was waiting to define technical standards that enable banks and service providers to connect. Our platform can adapt to any new requirements as it is based on an extremely flexible, modular API.

Regarding KYC/AML strategies with AML4, the rules are more or less the same for everybody in the game. It is very strict here in Luxembourg, as CSSF puts a close eye on KYC so that everyone is in line with the requirements.

We have a seamless process of identifying all our clients and the clients’ clients, including the work- and fund-flows, because every transaction is processed through our platform. We see the sender and receiver, we have automated screening implemented of all counterparties and, therefore, we feel comfortable with what we have implemented and what we see coming with AML5 and 6.

Can you give our readers more insights into your API-first technology?

Our platform is completely information and third-party API agnostic, being a fully modular scalable micro-service architecture in a cloud-based environment. Our clients decide what kind of modules they need and they only pay for what is used.

All functionalities – like multi-currency management, ePayment transfers or onboarding – are possible through the API. Later this year we will add cryptocurrency capabilities as well. That means that we have a direct interaction between conventional currencies, crypto assets and smart contracts.

Whatever will be available in the future regarding digital assets or value exchange, as soon as we connect the API and clearing, the respective currency or asset would be available. Therefore, the platform is steady and strong, and we are looking forward to what the future brings.

About Christoph Tutsch

Christoph is the founder and CEO of ONPEX. He started the company with the goal to provide businesses with a simple solution for online payments and banking. As payments expert, he saw the need for a solution to manage all financial processes in one single platform.

About ONPEX

ONPEX helps businesses build their own financial services. We provide multicurrency IBAN accounts and acquiring powered by a flexible, API-driven BaaS platform to create simple, compliant, and cost-efficient payment and banking solutions. As a Luxembourg CSSF-regulated payment institution and institutional SWIFT member, ONPEX focuses on improving the automation, transparency and efficiency of payment and banking transactions.

This editorial was first published in our Open Banking Report 2018. The Open Banking Report 2018 focuses on topics such as building trust, gaining consent and improving customer experience in Open Banking.