Manu Sporny wants to democratize online money transfers. His firm, Blacksburg, Va.-based Digital Bazaar, developed a new open standard for the payments called PaySwarm, which could help consumers, companies and even financial institutions make payments or transfer funds to anyone, anytime, or even invest resources in any currency. With others crowding into this field, including Paydiant which comes with a mobile payment option, we asked Sporny to explain his latest launch and how it might be adopted in financial services.
“There used to be a time where it was very difficult to send messages from one person to another person on the Internet. And then people came through and created standards for interoperability. Now when you send an email, you just need the email address and the network figures out which machines to use. It works very much like the U.S. Postal Service.
At the most basic level one of the easier things to think about is how does billing happen with your set of clients. Right now you collect credit card numbers, banking accounts, multiple accounts. Being able to move money in and out is fairly expensive. Just to process credit cards, we pay $1,000 in fees. That may not mean a lot to large planners, but that’s a size-able chunk of money to smaller operators. In having an open protocol, you aren’t charged a fee for being on the network. There’s a 2% flat fee and a cap on money that moves over the network, and that ends up being far less than you would spend in a current system.
One of the other things that PaySwarm allows a financial planner is to move very accurate, very small amounts of money. It can be used as a microsystem, and is accurate up to 1/100,000 of a US cent.
We’re creating a basic financial system where everybody can participate. Think about what the web did for publishing. You can publish anything you can think of. You can publish on the web and anyone can get it. There’s no longer a gatekeeper. We would love the financial community to understand this is not a threat and they can work with us. We want to see every bank as a PaySwarm authority. They can take a giant leap forward.”