As check registers and passbooks fade into obscurity for a growing number of bank customers, Realex seeks to further modernize payments by putting a human face on accounts.
"Rather than saying 'here's a list of accounts and transactions,' we give you a list of people that you pay, and you see photos of them," says Colm Lyon, Realex Fire's founder and CEO. "Instead of typing in a number on a site to make a payment to someone, you click on the image."
The Dublin-based Realex recently launched Realex Fire, a financial account that uses Facebook profiles to help users invite people that they frequently transact with to a "circle," or an online roster that is used for payments. It aims to adapt this for business clients in the near future.
In the current version of Realex Fire, consumers link their Realex account to a bank account to fund payments. Users can also view the people who pay them, see transaction histories, check balances and request payments from people in their circles.
"It's a personal account. It still doesn't have all of the features of a bank account. We're not a lender, for example, but it's an account that you can use to manage funds for payments," Lyon says.
Realex is currently available to consumers in Ireland and is limited to euros, and it plans to soon add other countries and currencies. "If you're a person who spends a lot of time in London, you may have people who want to get paid in Sterling," Lyon says.
Realex has processed e-commerce payments for more than a decade, and its clients include Vodafone, Virgin Atlantic, Aer Lingus, Party Poker and Not on the High Street. In 2012, Realex signed a deal with the processor Global Payments to provide a managed online payments service for all of its retailer clients.
The company also formed Realex Financial Services, a subsidiary that is regulated by the Central Bank of Ireland and is a member of SEPA. Realex Financial Services manages Realex Fire.
The consumer version of Realex Fire does not impose transaction fees. "We thought about having fees early on, but decided that it's important for adoption to not have fees," Lyon says.
The company is planning a business version of Realex Fire, which will include fees, Lyon says. Realex Fire's revenue would largely come from its business payment accounts rather than the free consumer accounts.
In its primary business, Realex processes $35 billion annually for about 12,000 online retailers in Europe, and the company aims to leverage that scale to quickly build a base for business payments that are made by transferring money out of savings accounts, Lyon says.
"We are seeing a significant rise on bank transfers online for business payments. Online transfers are a low-risk way to securely pay while shopping," Lyon says.
Realex will also offer its application programming interface for businesses to use to customize their payments systems, Lyon says.
The business accounts will be particularly important for Realex, since the consumer market for person-to-person payments is a relatively small segment of the total payments market, and is dominated by larger players.
"PayPal has the person-to-person market locked up," says Richard Crone, a payments consultant. "There is no way you and build a large [business] around person-to-person payments."
Other companies have also positioned themselves as alternatives to traditional banks by offering financial accounts that include payments function, such as Moven and Simple. Simple recently entered a partnership with Braintree to meld mobile payments and banking.
And Facebook is playing an increasingly large role in payments. It's testing a new service that allows consumers to use their Facebook profiles to execute payments on other e-commerce sites. Cardlytics uses Facebook to drive its rewards program, and Facebook launched a gift card in February.