The $25 million round also comprised high-profile participants including GV (Google Ventures) and Pantera Capital. The funding round follows an emerging trend of Goldman Sachs investing in blockchain companies such as Digital Asset Holdings and Circle.
The Veem Business Payment Network
Veem is a payment network founded in 2015 by Aldo Carrascoso and Marwan Forzley as a multi-rail technology for international payments focused on business payments. Veem’s customer base currently consists of over 80,000 small businesses in 96 countries.
The multi-rail technology behind Veem functions as an improvement over traditional international payment networks such as the exceptionally inefficient SWIFT network. Veem removes intermediaries in the payment process by using the blockchain as a settlement layer to directly connect customers, vendors, and their bank accounts.
Notably, the process is algorithmically maintained and bypasses intermediaries in the system by selecting the optimal route for payment rather than relying on the traditional banking payment network for international transfers. In conventional banking networks, transactions are not routed directly to the receiving bank but rather through a series of banks in between, each taking a small fee from the initial amount.
Veem automatically converts outgoing and incoming payments into the local currency and subsequently facilitates the transfer directly between the counterparties at the Veem exchange rate that they pull from data feeds such as Reuters and Bloomberg. The blockchain acts as the medium of transmission with the banks account involved in the transaction as the endpoints.
Developers can also connect directly with Veem’s API for integrating international payments into apps that they are building.
Despite its improvements on the traditional system, Veem still only offers payments initiated through banks such as ACH Direct Debits in the U.S. Further, international payments still take 1-3 business days to clear with a verified KYC/AML compliant account. Veem is also explicitly tailored for businesses, so personal payments are not available with their offering at this point.
Growing Popularity of Blockchain Payment Networks
Similar solutions in payment networks that are tailored for improving traditional payment rails are quickly gaining traction among legacy institutions.
Payment networks such as Ripple and their upcoming xRapid product have garnered substantial interest from payment processors and banking consortiums. SBI Ripple Asia just recently became a licensed payment agent with Japan’s Ministry of Finance, leading to 61 Japanese banks potentially integrating with the Ripple network for international payments.
Adoption of payment technologies such as Veem and Rippe by consortiums and payment processors, that increase traditional payment rail efficiency, shouldn’t really come as a surprise. Public cryptocurrency networks like Bitcoin exist outside of the financial system and present significant competition to existing payment networks and processors. Further, there are technical barriers to adoption as well as a general lack of understanding of what cryptocurrencies are by the mainstream.
For businesses that conduct international payments, Veem represents a much more efficient means of processing business transactions without the need to thoroughly understand cryptocurrencies or how blockchains work. Veem’s network has already seen some impressive increases in adoption from their initial customer base of 590 after its Series A funding round. How they fit into the evolving international payment structure will offer a unique proposition for evaluating the extent of blockchain technology’s impact on upending the outdated SWIFT system.