Electronic payments company Ixaris, which has about 20 corporate clients using its Ixaris Payments Server, will target corporate prepaid card-issuing financial institutions with the same technology.
"We have a limited sales team, and we thought 'what if we open this up to the broader banking industry?'" says Alex Mifsud, CEO of Ixaris. "It's a transfer of our experience with the early corporate adopters to banks."
The Ixaris prepaid server includes ready-built payment apps that have already been used by its corporate clients. The platform that drives the payments can be customized for a bank or its specific corporate clients, and institutions can also order new apps.
Issuers can also license the Ixaris toolkit to banks that want to build their own payment apps, Mifsud says. The Payments Server is an open system, meaning clients can access an application programming interface (API) to accommodate changes in card programs, regulations or market conditions.
"An API system has advantages, since many legacy systems are commoditized. They basically do one thing well and as long as you don't depart from that it's great," Mifsud says. "The picture gets tough when you have a variety of payment types, anything where you get non-standard transactions. A commoditized system is not fit for that purpose."
Ixaris aims to take advantage of a fast-growing market for corporate prepaid cards. The general prepaid card market is growing at a 22% compound annual growth rate, with the corporate prepaid segment projected to approach $400 billion globally over the next four years, according to MasterCard. MasterCard's own offering, inControl, allows companies to place parameters for spending on procurement, travel and entertainment.
Ixaris didn't name the clients using Ixaris Payments Server, but Mifsud says the technology has been applied to travel payments, where different cards have been traditionally used to pay for hotels, airfare, car rental and other expenses. The Ixaris engine can generate virtual cards for these purposes, Mifsud says.
"The virtual card has a unique number and is not used again," Mifsud says. The virtual card creates a purchase record can make risk, exceptions and reconciliation easier, he says. "If you have a general stream of transactions, it can be hard to find a particular purchase."
Ixaris did not detail its pricing, though cloud services often charge based on utilization, and generally don't require substantial initial investment since much of the technology is hosted and delivered in a software as a service model.
The hosted model can be helpful for issuing banks to manage corporate prepaid cards due to the complexity of the product, says Zil Bareisis, a senior analyst for Celent.
Issuers such as Citigroup are adapting their strategy for managing corporate cards and prepaid corporate prepaid cards are no different.
"There are a lot of different scenarios for corporate prepaid programs. Some corporates may have cards, while others may not use plastic at all, but instead use virtual cards," Bareisis says, adding that a hosted program specifically for corporate prepaid cards is rare. "It's very difficult to have a corporate prepaid card that would fit for all cases."
APIs are also becoming a common tool to help companies build payments platforms. Companies such as PayPal, Stripe and Dwolla extend their own tools to outside developers. Others, such as MoonClerk, make APIs accessible to small businesses that don't have much technology expertise.
Ixaris' approach resembles PayPal's X.commerce initiative, which allows outside developers to build on top of PayPal's system, Bareisis says. "Ixaris has the same thing, but they also have access to Visa, MasterCard, Swift and other networks."