ExtoPay

There are over 2 billion people globally that are unbanked and can't access financial services. Cash based economies make it difficult to allow financial institutions to develop credit risk profiles, efficient disbursement and collection  needed to open lending and or micro-finance to such underserved communities. Accessible digital payments are therefore the foundation needed for financial inclusion.  Since the launch of MPESA and other mobile money services a significant number of underserved users are now able to access digital financial services. But connectivity and cost of such mobile money services limit their use so that even with presence of mobile money 90% of payments are still in cash. The World Bank, International Monetary Fund and Central Banks have come to recognize that low cost universal access devices (e.g. hardware wallets) and totally off grid payments with no connectivity is needed. ExtoPay has been recognized as a platform which enables low cost means of off-grid payments with very high security and the ability to address the needs of the unbanked. We were selected as on of 15 finalists from 300 proposals for the Global CBDC challenge led by the Monetary Authority of Singapore (MAS), World Bank, IMF, UNHCR etc. We were one of the finalist for the G20 Techsprint for enable financial inclusion led by Bank Indonesia and Bank of International Settlements, we won the Reserve Bank of India (RBI) and National Payments Corporation of India (NPCI) Harbginger 2022 for extending Universal Payment Interface India with non-mobile and off grid payments. We have been selected by CSC a government entity in India to develop a pilot for rural payments in India. We are also engaged with multiple Tier 1 banks who are interested in our solutions for higher security payments in mature economies. These include Tier 1 Banks in India, Japan, and SADC region of Africa. 

ExtoPay is a digital payment solution that utilizes distributed ledger technology in combination with low-cost biometric smart card/wearable hardware wallets or mobile App software wallets. ExtoPay provides universal access to smartphone or non-smartphone users, secure offline transactions, recovery of lost funds, fraud prevention, and user controlled cryptographically secured digital ID. The system also enables agent based onboarding/KYC, cash-in/out and access to banking services. ExtoCard and App wallets enable users with a full range of online and offline payments very securely. Users can also use agent ExtoCard/App wallets and access their account using ExtoID verifiable credentials issued when then were onboarded enabling users without full featured ExtoCard or App wallets.

ExtoPay has best-in-class security by using edge based cryptography of distributed ledgers, low cost hardware wallets with easy to use and private on-card multi factor authentication. ExtoPay is an open-loop system which aims to enable negligible transaction fees and migrate monetization to financial services or closed loop marketing for merchant and brand loyalty.

ExtoPay is a multi-currency system that can use existing bank accounts and payment systems as a source of funds and for settlements. 

ExtoPay enables:

• Universal access via low cost, easy to use, secure hardware wallets 

• Offline transactions without internet or smart phones 

• 3rd party agent/merchant network for onboarding, cash-in/out and digital agent based banking

• User control over digital identity and payment data sharing

• Security and fraud resistance 

• Disruptive Merchant Point of Sale Wallets

• Multi-currency with support for retail CBDCs and Digital Fiat currencies

• Negligible transactions costs 

• KYC/AML accountability and compliance by PSPs and regulated intermediaries.

The proposed ExtoPay solution intends to imbibe all the possible features of physical currency.

• ExtoPay is a disruptive digital payment system that provides universal access for consumers and merchants reducing merchant transaction fees to negligible levels. 

Offline while preventing double spend:

• With ExtoPay system the offline transactions can be enabled in areas with no or limited internet connectivity along with safeguarding against double-spending and counterfeiting.

• The ExtoCard hardware wallets rely on a tamper-resistant hardware enclave to secure offline transactions against double spending.  Each device carries a unique private key, generated, and signed during manufacture, that attests to its authenticity and operation according to specifications.  Each Payment Provider maintains a list of root certificates to determine device authenticity prior to account activation.  Once an account is activated, transaction counterparties rely on Payment Provider attestations regarding account authenticity and capability.  The peer-to-peer transaction protocol is designed to make it highly unlikely that 2 parties can disagree on whether a payment completed successfully, as we take for granted when passing cash from hand to hand.

• In case a device is compromised, the proceeds of any such attack are bounded by measures that insure it is unlikely to be worth the effort.  Wallets must periodically synchronize with the DLT to acquire a Time Limited Spending Authorization for inspection by potential recipients.  Each Wallet also carries a signed photo of the authorized user, which can be requested by counterparties for verification on their own device.

The ability to engage in secure digital payments in the most remote settings will provide access to financial services. We have teams in various jurisdictions in Africa and India who have identified multiple communities in rural settings which are currently unable to access digital payments or mobile money. These include but are not limited to small dairy, vegetable, and fruit farmers who sell small volumes to their cooperatives. Daily or weekly collections are made in areas with no or limited connectivity but due to lack digital payments and lack of security of cash, payments are made only on monthly basis. This causes significant financial pressures forcing them to sell their goods outside of the cooperative for daily needs at lower prices. Solar micro-grid projects require efficient digital payments in areas where connectivity is limited. These projects require pay back over long periods of time and efficient off grid payments in settings with limited connectivity. Lack of means of credit risk data and ability to collect and disburse micro finance limits the reach of such initiatives. ExtoPay is secure digital payment method which both tracks spending via tokenizations and vouchers and provides high security. Its is bank on a biometric smart card and when users get back to connected money agents their data can be shared with micro-finance or other lending financial institutions. 

ExtoLabs has brought a world class multidisciplinary team together to develop ExtoPay. 

Amit Tyagi (CEO, Exto India Technology Private Limited)

Amit is leading Exto India starting Exto’s go to market in South Asia.  Amit co-founded iServeU Technologies Pvt Ltd a rural payment and financial services company in India. IserveU is rapidly growing with over 4 million consumers and nearly half a million merchants on its platform, delivering efficient digital payments and financial services via a strong merchant network. Amit sold a majority stake of IserveU to a Bank.  Amit is an accomplished Financial Advisory Management professional with experience of 16+ years in driving Sales & Marketing, Banking Operations, Internal Auditing, Administration, Risk Analysis, Internal Control, Business/Financial Analysis, Liaison & Coordination, and Team Management.

James Dailey (Chief Product Officer, Extolabs, US)James Dailey is a founding member and Chief Product Officer at Extolabs and Chief Executive Officer of Alluvial. A serial entrepreneur, James has worked on or launched a number of initiatives including openG2P, GovStack, openLMIS, and Mifos.  James is a fintech expert in emerging markets focused on banking and payment interoperability; over the past few decades he has been on the ground in dozens of countries and on multiple payments and banking projects for a range of international organizations, including Bill & Melinda Gates Foundation, World Bank, IFC, and the Asian Development Bank. Previously he built a venture-funded company linking carbon markets to microfinance. 

Istvan Molnar (Tech Lead, Extolabs, US) Istvan Molnar is tech lead at Exto and CTO of Alluvial. Istvan is a Financial Technology Architect from Budapest, Hungary with decades of experience implementing banking and real-time payment solutions at scale. Istvan has led the deployment of Mifos and Fineract at a bank in Germany as well as banks in SE Asia. Building off of the experience implementing real-time payment systems for Singapore and Hungary, Istvan has lead the design and architecture of Payment Hub EE, a powerful bridge and microservices workflow orchestration tool spearheaded by the Mifos Initiative with the support of the Bill & Melinda Gates Foundation, for integrating Fineract or other core banking platforms with real-time payment systems like Mojaloop and the ISO 20022 based SEPA Instant payment network.

Tim Dorcey (Chief Technology Officer, Extolabs, US) Tim Dorcey is cofounder and CTO of ExtoLabs. Tim has over 30 years of experience as a system architect and developer of advanced IP based communications, cryptography, and networking. Tim became well known when he launched the first Internet based Video conferencing solution in 1992 at Cornell called CU-SeeMe. Later he developed iVisit, the first p2p multiparty video and audio communication products including security and cryptography and authentication protocols. Tim has been part of 4 startups along with Orang since 2001. Tim has led the development of the ExtoPay system including all aspects of the clients, ExtoCard interfaces and backend. He has architected the security architecture of ExtoPay and system level defenses for offline transactions.

We have manufactured several generations of our Biometric Smart Cards and tested them in none payment scenarios as a secure online sign on via a kick starter project with over 1000 users (BeamU.Io). Our online-offline payments and distributed ledger settlement system is currently operation on AWS. Its our own modified version of the open source XRP ledger. We have completed development of our lower cost capsules which interact with the biometric smart cards allowing cards to act as point sale terminals for our system. We were selected by the Reserve Bank of India in a competition last year (Harbinger 2022) for extending Universal Payment Interface with non-mobile payment capabilities. We are currently integrating ExtoPay with Aaadhar onboarding and UPI. We are also adding RuPay EMV chips to the hardware wallets. We are going to be pilot ready later this year. 

About 80 users currently testing the system in US, India, and Kenya.

We are looking to enable a digital payment system which is like cash but better. Its like cash as it works with no need for connections and it won't have a transaction cost!. But it is more secure and the funds are protected with edge cryptography and biometric multifactor authentication. Lost funds can be recovered even if the offline amounts on the wallet are lost. We provide a built in digital identity system and keep the data under the control of the users while addressing KYC/AML. 

ExtoPay is the first system which utilizes both mobile wallets but also low cost hardware wallets and distributed ledgers to enable completely off-grid payments. A very easy to use but secure intermittent off-line/online transaction protocol secures the offline modes of operation protecting against double spending. The tokenization enabled by DLTs allows vouchers and tracking how funds are disbursed and spent. Extolabs has been selected as a finalist in several Central Bank Digital Currency competitions, these include being one of 15 finalists as part of the Monetary Authority of Singapore's Global CBDC challenge, One of the finalists of the G20 TechSprint led by Bank Indonesia, Winner of Runner UP award by the Reserve Bank of India's Harbinger to extend UPI with non mobile and offline payments. ExtoPay is the first system which enables universal access for users with or without mobile devices or connectivity and more importantly eliminates transaction fees of merchants. 

We aim to launch pilots over the next 18 months in Kenya, South Africa Development community countries, and India. Multiple use cases will be demonstrated, these will range from low end of the market for underserved and underbanked but also higher end of the market for banked and B2B usage. 

We have been engaged by organizations interested in rural payment applications but also by Tier 1 Banks interested in higher security features of our solutions. We aim to lower the cost of the cards by developing an ultra low power system on a chip and various configurations which allow user of wearables where the cards are used as a point of sale device. Users would carry their biometric templates on capsules and use the cards of the merchants as the authentication device with very high security and privacy. 

We aim to enable digital payments where it has not been possible before. We are aiming to show case the value of the offline/ offgrid payments in extreme settings without the need for connectivity. 

ExtoPay is a complex system which brings together ultra low power semiconductors, cryptography, permissioned highly scalable distributed ledgers, compact fingerprint recognition and interoperability with banking systems together to enable a novel digital payment platform. 

We are designing extremely compact ultra lower power system on a chip which is at the heart of the low cost wallets providing the low cost and low power required. These SoCs require ultra low power bluetooth, compact hardware accelerated fingerprint recognition, E-Paper and capacitive touch display interfaces and advanced manufacturing to automate manufacturing of these hardware wallets. 

Our DLT systems use novel methods to achieve high scalability and low latency. 

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