Company: Clear Junction
CEO and Founder: Dima Kats
Website: https://clearjunction.com/
About Clear Junction
Purpose
Lack of financial inclusion is not just a problem for individuals. Many licensed financial institutions and businesses are locked out of accessing the services they need. This is since banks are typically reluctant to work with other banks due to regulatory risk constraints.
Dima Kats, CEO, founded and bootstrapped Clear Junction in 2016 with a mission to provide essential payment services to this industry. He did this by addressing the constraints that restricted traditional service providers: setting the risk appetite, developing the risk management methodology, and designing the technology to ensure consistent regulatory compliance and commercial viability of the service.
About Clear Junction
Clear Junction provides correspondent banking, e-money accounts, virtual IBANs and treasury services to financial institutions, banks, remittance companies, payment service providers (PSPs), and crypto companies. It addresses their chronic underservice with access to banking and payment solutions that have traditionally been challenging for them to obtain.
It addresses high FX fees, transaction costs, long settlement times, and lack of multi-country payment options, which hinder business growth.
Major solutions include:
Correspondent accounts: Payment accounts for banks and PSPs to facilitate payments in the name or on behalf of their customers.
CJClique: A new platform for digital asset clients to collaborate with other industry players.
Escrow account: A delivery versus payment solution in which escrow accounts are used to eliminate counterparty risk and ensure trust in digital asset trading businesses.
Stablecoin service: Licensed financial institutions can send payments in USDT/USDC globally. Companies can use this service for time-sensitive settlements with global counterparties. Payment processors and card acquirers can expand settlement methods for their merchants through offering on-chain transfers.
Growth
In today’s reality, where the majority of fintech start-ups are struggling to survive and are totally reliant on venture capital funding, Clear Junction is a very profitable business without external investment and zero debt:
– Over 400 clients
– Annual revenue skyrocketed to over €20 million with EBITDA of 30% and higher
– Revenue forecast to increase over three times in the next three years
Dima prioritises compliance and trust over rapid growth. He has turned down clients if risks compromise Clear Junction’s stringent due diligence standards.
Technological stability is essential for Clear Junction’s clients, which is why its platform operates at 25% capacity to ensure it can accommodate clients’ traffic and any significant surges in volumes.
Impact
Clear Junction reacts to market conditions to ensure it’s offering the services clients need. For example, in June 2023, it launched CJClique, a platform for digital asset clients to collaborate. With the platform, digital asset liquidity providers can streamline settlements by identifying which crypto exchanges are already part of Clear Junction’s client base and initiate prompt internal settlements through its payment network. Users can also introduce themselves to new crypto exchanges and form meaningful partnerships – using each other’s strengths to develop innovative solutions that comply with regulations.
Clear Junction provides services to institutions, but on the other side of those institutions are families who depend on those services. It provides an efficient, fast and cheap channel for payment companies to facilitate remittances through the issuance of core virtual accounts, which Clear Junction sets up for recipient families in the destination country, enabling people to send money home quickly and safely.
One of its success stories is Monobank, one of the largest neobanks in Ukraine that moves billions of euros in remittances to people there. Clear Junction also enables several payment and e-wallet companies in Africa and Turkey to receive remittance flows from Europe and the UK.
Clear Junction’s diverse team includes over 35 people in the London office, and 100 across Latvia and Poland. Languages spoken include English, Ukrainian, Portuguese, Spanish, Latvian, Russian, Hebrew. The team is split 40/60 between men and women, and half of its C-suite members are female.
