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In the summer of 2020, after pandemic-driven markets collapsed, SoftBank Group surprised Wall Street with a series of bets on US tech. Behind the deal — which earned SoftBank the “Nasdaq whale” moniker — was. Akshay Nahetaan executive whose career has been marked by bold bets on disruption.
Now, after making multibillion-dollar deals, including an attempted merger with Nvidia and ARM, Naheta is making his most ambitious bet: That the world’s payment systems are ready for a renaissance.
Its launch in Zug, Switzerland, Distributed Technologies Research (DTR), is trying to bridge the gap between banking technology and blockchain, joining a group of companies that are trying to improve payment systems around the world.
The founders say its technology can eliminate a variety of payment inefficiencies, from currency and exchange rates to foreign currency exchange rates and payment delays. “Today’s payment networks have a lot of problems – transaction fees, transaction fees, FX fees, late returns and other intangibles,” Naheta told TechCrunch in an interview.
DTR’s core technology, AmalgamOS, connects banks with blockchain networks. Through APIs, it allows businesses to integrate payment capabilities while complying with local regulations. The system can handle everything from transaction payments to financial management, supporting traditional currencies and major stablecoins in 48 countries.
The startup has created what Naheta describes as “global music” that automatically processes transactions through traditional banking systems or blockchain, based on an approach that offers the right combination of speed and cost. “We are connected to 12,000 banks in Europe,” he said in an interview. A business integrating DTR’s APIs can allow its customers to initiate transfers directly through banking applications.
DTR’s push into premium products comes at what appears to be an opportune time. Visa and Mastercard – both pay 2-3% transfer fee— which is often the second-highest cost for merchants after fees — are facing more scrutiny on their two sides, and the proposed US Credit Card Competition Act would require banks to offer merchants alternatives to networks. adults.
DTR’s early customers say its infrastructure fills a big gap. Philip Lord of Oobit, a crypto wallet startup, said the system allowed his company to transfer money from its crypto wallet to a UK bank account on Christmas Day in less than 30 seconds – a transfer that would have taken days through traditional methods.
Naheta’s interest in payment systems comes from an unlikely place: SoftBank’s Purchase of Fortress Investment Group in 2017. The deal put nearly $20 million worth of Bitcoin on SoftBank’s shelves.
When he learned about blockchain technology, Naheta says he saw an opportunity to apply his wireless communications background to payment networks. While at SoftBank, Naheta had begun assembling what he hoped would be the founding team for DTR. He contacted his high school counselor, Pramod ViswanathThe wireless communications expert who is now leading the center of Princeton’s blockchain is Sreeram Kannanwho will later begin Its layers.
The team envisioned blockchain as a peer-to-peer technology at its heart, which could use decades of research in wireless technology to revolutionize payments. Naheta said he was on the verge of resigning from SoftBank in the summer of 2018 to focus on DTR and crypto venture Bakkt, but was forced to retain senior executives, including Rajeev Misra and Masayoshi Son.
Naheta’s previous investments in the payments sector included SoftBank’s investment in Wirecard, which later collapsed. SoftBank still made a profit on its investment in Wirecard. He admitted: “I have made many mistakes. “I looked it up, here’s a company that’s licensed around the world, it’s got the technology to pay for it.”
These developments appear to have affected DTR’s emphasis on compliance and institutional integrity. This measurement method extends to the size of the company. “Even if I increase the number of people to 60 by the second quarter, we will have an opportunity to raise money,” he said.
Startups are facing competition on many fronts. Wise has created a successful business matching money flows between countries, Ripple offers blockchain stability despite legal challenges, while traditional banks also say they are upgrading their systems using methods such as SWIFT. Last, but not least, Stripe’s recently $ 1 billion to get Bridge stands to help the world’s most important fintech startups to enter the payments industry.
However Naheta sees an opening in serving businesses caught between these countries – especially digital immigrants, financial platforms, and companies operating in emerging markets.
“Banks don’t have the tools to handle KYC/AML at a lower level, where you pay 200 to 10,000 people a month,” he argued. The fragmentation of national payment systems creates challenges for businesses operating around the world, as each region maintains its own rules and regulations.
The proliferation of payment processing companies and online results makes it difficult to mess up. PayPal commands a market cap of $70 billion despite recent declines, while Visa and Mastercard combined are worth more than $1 trillion.
“I think the customer is struggling with the payment,” he says. “And it’s not the banks’ problem. They are tied into the historical system and it is very difficult to change the Titanic. “
The Lord of Oobit said in an interview that the site remains open. He added that until a year ago, the only way for businesses that needed to move between crypto and traditional banking systems was to “go as an OTC store and pay maybe 1 to 3% for the transfer.”
“It’s crazy that over the years, we’ve had a lot of initiatives, we’ve had a lot of money, and every time I wanted to create a way to enter a road or a road, there was no legal system around,” he said. other.
