technology behind money.
True transformation in payments requires moving money digitally with ZERO cost.
Think about this. Zero. Like a Skype call or WhatsApp message.
Blockchain technology showed us a glimpse of this future, but spawned cryptocurrencies requiring gigawatts of processing power and armies of compliance officers to argue with regulators. Close, but not yet truly zero cost.
We took a fresh approach. We launched a new payment technology based on distributed ledger that works with the banks and not against them.
What did we achieve? An instant, point-to-point system that transacts everyday currencies with zero variable cost, even on your mobile phone. Just like Skype, huh?
Our technology enables frictionless payments on any device. Think of us as a second payment rail for banks, where payment solutions can be innovated for companies, merchants, users and especially, banks. And best of all, an elegant fit into existing e-money regulations.
We can eliminate clumsy pre-paid solutions used when legacy bank systems are most ineffective, and thus help bring the 2.5 bn financially excluded into the digital economy.
What is wrong with payment systems today?
The fundamental architecture of payments was built over 50 years on the principle that dumb data must be protected behind hackable firewalls. Banks -as custodians of the information about who owns funds- spent millions over decades on technology and partners to make sure that all parties agree before ownership is transferred (or reversed if there was a screw-up).
As a result, we see a system where:
- Settlement (messages that a transaction took place) and clearing (final ownership reconciliation) are separate processes.
- Mismatches in the timing of funds authorization generate overdraft risk.
- Several intermediaries are required to process even simple transactions.
- Hackers can attack centralized authentication systems.
As consequence, exception handling and chargebacks are continually needed.
What if we could start from scratch?
Blockchain showed us that data can be “smart”. Firewalls can be eliminated. Two parties can transact in a way that settlement and clearing can be collapsed into an atomic, uninterruptible transaction. At Billon we are convinced new currencies are not necessary. We went a step further than cryptocurrencies by developing a technology that complies with current e-money regulations.
Billon uses the principle of indisputable ownership as the stepping stone for its entire full stack of technology.
A regulated institution acts as issuer, and each holder of funds controls what they own, and can transfer as they see fit.
Sounds simple, right?
These principles (and 5 years of hard work and endless testing) delivered a system which integrates with banks and shift the mindset from worrying about payment cost, to focusing on the potential to create value-added services.
We went live in 2016, and became a registered FCA e-money issuer in 2017.