Vogogo has announced a new partnership with Knox Payments that will enable its future US clients in the digital currency industry to accept payment from any US bank account and to better access commercial banking.
More specifically, the agreement will connect the Calgary-based regulatory and risk compliance specialist to its new partner’s USD payments network and domestic banking connections. Vogogo raised $8.5m in funding in August to extend its solutions to new target markets, including the US and Europe.
Vogogo CEO Geoff Gordon positioned the news as an important step in the international expansion of his company, albeit one that would benefit the wider US bitcoin industry as it seeks to bolster its compliance and risk management in line with direction from regulators.
Given the banking challenges facing the bitcoin industry, Gordon told CoinDesk that bitcoin exchanges and processors are already lining up to apply for the service:
“Our sales queue is already very, very long. We already have more merchants than we could possibly handle in terms of processing. Of course, we’re talking to everybody, [but] we’re to have to be very selective about who we work with in these early days in the US market. There’s certainly a lot of business out there.”
Launched in 2008, Vogogo serves clients in the e-commerce space as well, providing risk management, compliance tools and online payment services. The company’s backers include Beacon Securities, Clarus Securities, Cormark Securities, Genuity Corp and Salmon Partners.
Expedited US launch
Gordon indicated that the partnership with Knox will allow Vogogo to push up its US launch by an estimated two to four weeks, while using the company’s proprietary cross-payments platform, which transacts payments in real time.
Gordon said the companies were able to find a way to benefit each other, with Vogogo providing its experience and Knox its banking relationship.
“We brought the missing piece of the puzzle for them, that’s the result of this agreement,” Gordon said, stressing his hope that Vogogo’s service will now enable more businesses in the bitcoin and wider digital currency space to obtain the tools they need to serve US customers effectively.
“At a very base level, [cryptocurrency companies] are struggling to get access to banking, because they don’t have the risk management and the compliance to effectively convince a bank to work with them and to work with them in a commercial capacity,” Gordon explained.
Knox takes interest in industry
Knox Payments CMO Charles Merritt emphasized in an interview that the ACH payments specialist will in turn gain the ability to serve clients in the cryptocurrency community with an innovative compliance product.
Merritt framed his company’s interest in bitcoin as part of its wider goal of enabling better and more cost-effective digital transactions.
“Cryptocurrency is the outcome of some very large developments in technology and shifts in how we think about money as a store of value and our hope with Vogogo is to understand a little bit about how that market works,” Merritt said.
Merritt added that he has purchased bitcoin because he believes it is “personally fascinating”, and that a number of employees on the Knox Payments staff are passionate about the potential applications of the technology.
Launched in February with $900,000 in funding, Knox is currently working in a number of sectors of the payments space, including cryptocurrency, though the company said it will not seek to specialize in any one area.
Images via Vogogo; Knox; and Shutterstock