The payment industry has evolved a lot in the past decade, where paying a person has become as easy as sending a text message. This advancement in electronic payment and introduction of peer-to-peer payment has often come with the question of whether you are paying the right person.
While the European Union introduced Payment Services Directives 2007 (PSD1) to make payments safer and secure for consumers and followed up with PSD2 in 2015 to increase competition from non-banks, there is often confusion surrounding International Bank Account Number or IBAN.
To overcome this challenge, Marcel Rienties and David-Jan Janse started SurePay as an IBAN-Name Check platform that prevents misdirected payments and fraud. Their story shows how the rise of fintech is also massively driven by innovation.
Payments made easier and personal
The idea of Surepay struck Rienties and David-Jan Janse when they were working on a new Rabobank app with the goal of improving payments. “We believed that paying your friends or a company should be as easy as chatting, calling, sharing: you tap someone’s picture or logo and initiate a payment,” says David- Jan Janse .
However, their new app still relied on making payment to an account number, which meant dealing with IBAN’s and opening a possibility of error and fraud. Their solution to this problem became Confirmation of Payee or IBAN-Name Check while making a payment.
This feature made sure that the name is checked for the genuine account holder and prevented misdirected payments. In 2016, the co-founders of Surepay invented this Confirmation of Payee feature as a startup of Rabobank but became an independent company in 2020.
SurePay operates in four EU countries and provides check-services to banks, government, and corporates. The innovation has been so crucial that the European Commission has proposed making the IBAN-Name Check mandatory for all instant payments.
David-Jan Janse says, “Our service has a huge impact and results in an 81 per cent reduction in impersanation scam like invoice fraud and a 67 per cent reduction in errors in online banking. Companies use our solution in multiple business processes, such as customer or supplier onboarding, resulting in 80 per cent less fraudulent onboardings. Besides preventing or detecting fraud, the value is often much more in efficiency and getting it right the first time.”
With IBAN-Name Check success and using its network with the banks, integration at payment initiation as well as the KYC account holder data, Surepay has developed more services like Pay to Mobile contacts including Mobile number-Name Check, switching notification when users pay or draw from a new account number, an CompanyID check.
With a business model based on fee-per-check and monthly invoicing based on tiers and subscriptions, SurePay shows how critical innovations are necessary in a fast changing payment environment. The innovation has not gone without notice and Iris Capital and Connect Capital invested €12.2M to help the Dutch company scale its business.
Solving a complex problem
Rientes says when banks tried to solve the fraud problem by checking a name they cited data sharing, GDPR, and SEPA regulation to not go through with their innovation. As a result, SurePay had to not only innovate the process but also validate till their IBAN-Name Check service became easy to use.
“[The service] is based on a complex algorithm and handcrafted rules (not based on AI),” explains Rientes . While banks don’t share data with each other, Surepay also doesn’t disclose personal data.
Rientes, CPO of SurePay, says inventing the service and creating an ecosystem of banks was a challenge at first. Once they had a network of banks, it was all about creating the business model and co-creating the accompanying contracts, which he reckons is still the foundation of their business.
CEO David-Jan Janse says they were able to solve this complex problem by handpicking team members out of their network knowing their “capabilities, knowledge, and personality.”
He also acknowledges the key role played by trainees, graduates, and interns with senior roles and responsibilities. “These team members were really independent
and self-propelling,” he adds.
Rise helps focus on scaling
SurePay was one of the ten Dutch scaleups to join batch #9 of Techleap.nl’s Rise programme . “The Rise programme is an excellent programme with sparring sessions with each other and experienced experts, stories, and Q&A with icons per topic,” says David-Jan Janse.
He says an entrepreneur and the management team is often focussed on scaling the company, customers, prospects, partners, and stakeholders. They need an opportunity to benchmark, share experiences, and get inspired, which the co-founders of Surepay found in the Rise programme.
While it is early in the programme for batch #9 participants, David-Jan Janse feels they have already built relationships that will last. “We already have a list of learnings on HR and Go International,” he says.
For him, the next sessions of the Rise programme will be about getting even more benefits in the form of connection and giving back. He says they see a real opportunity to not only learn but also extend their network with the Bold community.
Inventing a new business and making solutions more widely accessible
For Marcel Rienties and David-Jan Janse, the long-term vision is to turn SurePay into a specialist and market leader for Confirmation of Payee in the EU . By scaling in the European Union, they aim to connect the world for domestic and multinational banks and corporations.
With added services, Rientes says they will be able to strengthen their position to fight fraud and reduce operational costs in payments. They aim to do that without any additional funding in 2023.
David-Jan Janse says he will consider Surepay to be successful if it becomes “the specialist and market leader in every EU country and the EU hub for multinationals” but envisions one where it is also a specialist worldwide.
He says that will only be possible if they continuously focus on “Who’s the customer? What’s the problem?”. It is also great advice for aspiring entrepreneurs. “Most successful startups have pivot to the successful service. The first idea is not always the best solution,” he says.
They say the next step is to make their solution more widely accessible, including those who want to perform checks online. With a portal already developed and accessible at this link , SurePay is not just about inventing a new business and making solutions more widely accessible.