SoftBank Veteran Reinvents Payment Infrastructure with Blockchain Startup
In the summer of 2020, amid the market upheaval driven by the pandemic, SoftBank Group made waves on Wall Street with substantial options bets on U.S. technology stocks. These actions, which earned SoftBank the nickname of the "Nasdaq whale," were orchestrated by Akshay Naheta, an executive known for his bold moves on market disruptions.
Pivoting to Payment Infrastructure
After executing several multi-billion-dollar deals, including the high-profile merger attempt between Nvidia and ARM, Naheta is now setting his sights on an area he considers ripe for transformation: payment infrastructure. His latest endeavor is Distributed Technologies Research (DTR), a Zug, Switzerland-based startup attempting to modernize global payment systems by merging traditional banking with blockchain technology.
Innovating with AmalgamOS
DTR’s core offering, AmalgamOS, aims to eliminate inefficiencies in current payment networks, such as transfer costs, interchange fees, foreign exchange conversion charges, and settlement delays. "Current payment networks suffer from inefficiencies," Naheta explained in an interview. Through APIs, banks and businesses can integrate DTR's payment systems, ensuring compliance with local financial regulations across 48 countries.
"We’re connected to 12,000 banks in Europe," Naheta stated, highlighting the extensive network that enables efficient payment processing directly through banking apps.
Rising Opportunities Amid Traditional Dominance
DTR’s entrance comes at a critical juncture, as global giants Visa and Mastercard face scrutiny over their high swipe fees, which are a significant cost to merchants. U.S. legislation like the proposed Credit Card Competition Act could further promote alternatives to existing payment networks.
Early adopters of DTR's technology, like Philip Lord from the crypto wallet startup Oobit, testify to its efficacy. Lord shared that their system moved funds from a crypto wallet to a UK bank in under 30 seconds, a feat that previously took days through conventional methods.
A Veteran's Vision
Naheta's journey into payment systems was inspired by SoftBank's acquisition of Fortress Investment Group, which placed Bitcoin on its balance sheet. Recognizing blockchain's potential, Naheta leveraged his expertise to bridge gaps between wireless communications and financial networks. He enlisted academics, like Pramod Viswanath and Sreeram Kannan, to build a team dedicated to leveraging blockchain for payment innovations.
Despite previous setbacks, including SoftBank's investment in the now-defunct Wirecard, Naheta draws on these experiences to emphasize compliance and stability within DTR's operations. His strategy is careful and growth-oriented, aiming to achieve profitability even as they expand staff numbers.
Competitive Landscape
In a field crowded with competitors like Wise, Ripple, traditional banks, and fintech firms like Stripe, Naheta sees unique opportunities, especially for businesses operating globally with complex payment needs. "Banks are not equipped to run KYC/AML at that small level," he mentioned, pointing out the struggles of handling smaller, frequent payments for businesses crossing jurisdictional lines.
"The retail customer is getting screwed on payments," Naheta stated, attributing the challenges to legacy systems that banks are tethered to.
With high industry margins and formidable network effects, disrupting the payment sector is challenging. Yet, DTR’s innovations promise speed and efficiency, addressing critical gaps in the current market landscape where Naheta envisions vast untapped potential.
With the payment industry's barriers and opportunities in mind, Naheta remains optimistic about DTR’s role in shaping the future of financial transactions.