NoFrixion is a Money Movement platform combining the technology and regulatory authority to enable businesses to send, store, receive and reconcile funds programmatically. It is an Embedded Finance solution, focussed on embedded money movement.
Founded in 2020 by Feargal Brady, Chief Executive Officer and Aaron Clauson, Chief technology Officer, NoFrixion raised €3.6m in seed funding in 2022. They were registered as Virtual Asset Service Provider (VASP) on the 31st of May 2023 by the Central Bank of Ireland (CBI), followed by authorisation as an Electronic Money Institution (EMI) on the 25th July 2023.
Fintech Ireland's Susan O'Neill caught up with Feargal Brady who talked us through NoFrixion’s plans for revolutionising money movement.
Fintech Ireland (FI): Tell us how you became involved with the payments industry?
Feargal Brady (FB): Myself and Aaron founded a business called BlueFace, an IP telephony company, back in 2004 just as the deregulation of Telecoms began. It was the early days of IP telephony, of Open Source software and the Cloud had yet to be invented. We built a full telephony platform in software, and provided IP telephony services to consumers, then businesses, and finally other telecoms companies. We were part of a global movement which designed and built the foundations of the embedded audio/video platforms which are so part of our lives now.
Throughout our careers, our experience with payments, banking and money movement in general has been really poor – both the business and the consumer experience. Any interaction required internet banking, while the functionality was always limited.
Aaron got involved with Bitcoin in 2015 and became one of the developers for Bitcoin Core. He introduced me to the Lightning Network, we thought it was an amazing way to pay online. We explored this, came across Open Banking, and decided that the business world needed better ways to transfer value.
The solution was to build a current account with IBAN in software, with connectivity to the international payments rails, including Bitcoin Lightning for futureproofing. The goals was to enable businesses to send, store, receive and reconcile using the API. By presenting a current account as a software API, money becomes programmable. The concept of separate accounting and current account platforms results in manual reconciliation and all sorts of delays and problems. Through our API, businesses have access to card acquiring, to SEPA and Faster Payments, access to the Lightning Network and most importantly to the core current account & IBAN which is built in software.
Throughout our careers, our experience with payments, banking and money movement in general has been really poor – both the business and the consumer experience. Any interaction required internet banking, while the functionality was always limited.
Aaron got involved with Bitcoin in 2015 and became one of the developers for Bitcoin Core. He introduced me to the Lightning Network, we thought it was an amazing way to pay online. We explored this, came across Open Banking, and decided that the business world needed better ways to transfer value.
The solution was to build a current account with IBAN in software, with connectivity to the international payments rails, including Bitcoin Lightning for futureproofing. The goals was to enable businesses to send, store, receive and reconcile using the API. By presenting a current account as a software API, money becomes programmable. The concept of separate accounting and current account platforms results in manual reconciliation and all sorts of delays and problems. Through our API, businesses have access to card acquiring, to SEPA and Faster Payments, access to the Lightning Network and most importantly to the core current account & IBAN which is built in software.
FI: What made you apply for a VASP registration?
FB: We envision the emergence of the Lightning Network as a means of value transfer and we want to make sure we are ready for that – with both the technology and the regulatory authority. It’s hard to say when this will be, but there are a large number of use cases emerging. For example, it is an effective software solution for money transmission, it is ideally suited to micro-payments, and it can bypass currency exchange requirements.
FI: How did you find the VASP registration process?
FB: Given the news over the last year in particular in the cryptocurrency world, it is great to see regulatory oversight to the level implemented by the CBI. It will be very interesting with MiCA being introduced, and we see it as something that is absolutely necessary. We found the applications process to be clear and transparent. The CBI are extremely professional, they clearly understand the area and they have got the expertise in-house to evaluate applications to the level necessary. It is a really difficult task, as there is so much happening and the area is moving so fast. The process itself was actually extremely useful as they look at things from a different perspective that you wouldn’t necessarily be aware of coming from a purely technical point of view. It is exactly this kind of expertise and insight which is required of a regulator, and will ensure a very high level of compliance for companies in the space.
FI: Does NoFrixion have any plans for expansion in Europe?
FB: Our primary focus right now is commercial development and building on the achievements of the past year. Embedded Finance has emerged as one of the biggest game changers in Fintech, and for us the money movement aspect of Embedded Finance. By bringing accounting and current accounts together it is possible to eliminate vast elements of manual processing around accounts receivable and payable. We have built out our core platform including integrations with the international payment rails to facilitate this.
There are two products - MoneyMoov for business is effectively an all in one accounting and current account, while MoneyMoov API enables core business applications to be integrated directly. Both result in the elimination of internet banking as a means of accessing the current account. We think that in the near future, Lightning Wallets will become more prevalent, and we will be ready to provide the service - so it is as much about future proofing as anything else. We also have a custody service / vault to enable secure Bitcoin storage and to exchange for fiat currency also.
We are obviously looking at MiCA now, and in the short term we are hoping to see Lightning adoption, to enable us to expand around Europe in tandem with MiCA.
There are two products - MoneyMoov for business is effectively an all in one accounting and current account, while MoneyMoov API enables core business applications to be integrated directly. Both result in the elimination of internet banking as a means of accessing the current account. We think that in the near future, Lightning Wallets will become more prevalent, and we will be ready to provide the service - so it is as much about future proofing as anything else. We also have a custody service / vault to enable secure Bitcoin storage and to exchange for fiat currency also.
We are obviously looking at MiCA now, and in the short term we are hoping to see Lightning adoption, to enable us to expand around Europe in tandem with MiCA.
FI: How does NoFrixion plan to leverage the Lightning network?
FB: We have been running our own nodes on the Lightning network, contributing to some of the backend engineering – Aaron is involved in various Lightning projects which gives us really good visibility into what’s happening. We expect it to start to take off in the short term, and there’s some really interesting and innovative use cases as I mentioned.
FI: Do you see a future where traditional institutions adopt the Lightning network?
FB: There is use cases for all of the payment methods including SEPA, Open Banking, card payments etc, and there is definitely a demand for something like Lightning for micropayments as its extremely low cost, instant and decentralised. PoS is another good use case. Lightning will be another way of moving value, in particular on the internet. Some of the really interesting use cases are around currency exchange where it has the potential to eliminate exchange fees. The sheer volume of brain power going into the development of Lightning is extraordinary - some of the projects that are underway are incredible. It will be a very interesting few years.
Susan O'Neill is CEO & co-founder, SuLu Solutions providing digital assets strategy solutions. SuLu Solutions recently won the award for most Innovative Business idea at the New Frontiers Programme (Enterprise Ireland) showcase event at South East Technological University. Susan is on the Fintech Ireland Advisory Council.
If you wish to speak with Fintech Ireland about being part of our Fintech Leaders Series of Q&As appearing on our website and/or newsletter, please contact us at [email protected].