ConnectPay is a licensed EMI in Lithuania whose purpose is embodied in its name—connecting anything payment-related for its customers, in any way possible.
“We’ve essentially built in-house tech for every service that an EMI is allowed to offer, and we help our customers connect those up in whatever way suits them best,” says Marius Galdikas, CEO of ConnectPay.
The Lithuanian fintech focuses on embedded finance for businesses in various sectors, including other fintechs. It offers solutions for loyalty programs, crowdfunding, and even sports clubs—pretty much any entity that hopes to integrate some form of payment into its app or website. Solutions might include accounts with multi-currency support, card issuing (including loyalty cards or fan cards), acquiring, or open banking.
“ConnectPay closes the payment loop, thus significantly reducing costs of inter-ecosystem transactions for that entity,” says Galdikas.
Payments as components
ConnectPay operates through a lens of “payments as components”—modular, scalable functionalities that can be seamlessly integrated into an app or platform as the business grows.
“We want to turn payments into an actual commodity, making any transaction frictionless, whether it’s between a merchant and a customer, or an investor and a borrower,” says Galdikas. ConectPay achieves this by creating tech that “just works,” and which basically any entity can use inside its platform.
Unlike other backend fintech providers, ConnectPay has a strong focus on businesses that don’t necessarily have a fintech connection, such as online marketplaces or sports clubs with a fan base. It looks for entities with a user base of 40,000 or more, at which point that entity would start to see significant savings from using an in-house payments solution.
By closing the payments loop, clubs can save on interchange fees and chargeback risks while also gaining insight from fan spending data. That aggregated data can then help the club—or any business—make better decisions regarding what its customer base is interested in.
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A one-stop solution in Europe
ConnectPay, one of the top four EMIs in Lithuania, is passportable across the EEA, allowing it to serve any European entity. It can act both as an issuer and an acquirer for online transactions.
For all embedded finance clients, ConnectPay additionally handles all KYC and compliance issue processes as part of their standard offering. “It all operates under our license, so we’re extremely careful to ensure the transactions are compliant,” says Galdikas.
For crowdfunding and other alternative finance platforms, ConnectPay “does all the plumbing for fund movements.” ConnectPay’s technology onboards investors and project owners, captures funds from investors, transfers them to project owners once fully funded, and facilitates interest and repayment flows back to investors.
Offering what banks can’t
ConnectPay fills a gap that traditional banking can’t—the area of fast transactions. “A bank’s primary business is lending. They take in money and lend it elsewhere to earn interest. Banks make money when they hold your money, not when it flows,” says Galdikas.
Banks have little incentive to invest heavily in tech that facilitates high-velocity fund movements, which is why companies like ConnectPay can capture market share in this sector.
ConnectPay has also built its entire tech stack in-house, giving it an edge over competitors that rely too heavily on vendors. An overreliance on third parties can significantly slow a competitor’s ability to innovate and respond to unique customer needs. “That’s why we decided from the start to do everything in-house—because we can tweak any tool for any customer at any time,” says Galdikas.