PayStand, an e-commerce gateway for alternative and traditional forms of payment, is opening up its application programming interface (API) to support payments with credit cards, e-checks and Bitcoin.
The API will allow developers of mobile and e-commerce sites to "re-imagine financial systems," said Jeremy Almond, co-founder and CEO of PayStand. "Developers can access [tool sets] from traditional players pretty easily but maybe not so much for alternative forms of payment."
The year-old company has been running pilots with developers all summer, building apps on top of its API to support different payment networks and types, with a goal of making payments more efficient and cheaper for merchants.
"More and more developers are flocking to the e-check rails," Almond said. "Developers are building new billing, invoicing and payroll type services."
Digital checks have been a ripe space for startups to innovate in, as the big technology companies such as Amazon, Apple and PayPal work on their own mobile wallets. Billions of dollars gets sent via check still, especially in business-to-business payments.
Businesses with large invoices don't want to accept a credit card because of the transaction fees, said Almond. With a 3% interchange fee, the recipient would be charged $300 on a $10,000 payment, which is high compared to fees for an e-check or automated clearinghouse (ACH) payment.
Virtual-currency technology is also getting a lot of attention. PayStand is seeing both enterprise and loyalty companies building on top of Bitcoin's blockchain system, said Almond.
PayStand's API allows merchants "to move money in with the e-check rail, pay with card networks and store loyalty on the Bitcoin network," Almond said.
Prior to joining the summer's pilots, one billing company was "building out its work flow but didn't want to take on payments because of the regulatory issues and contracting the banking," said Almond. "But we provide the core nucleus of everything they needed," he said. PayStand also worked with micropayment and mobile gaming companies during the pilot.
PayStand deals with all PCI compliance concerns and tokenizes card data so the merchant has a lower PCI burden. And because PayStand has partnerships with the top ten banks in the world, businesses working with PayStand aren't actually transferring the money themselves and so it isn't necessary for them to comply with money transmitter requirements.
Using a software as a service model, a basic PayStand package which includes access to the API costs $299. The company has packages with varying prices for startups and large enterprises.