Parallax, a Philippines-based startup, has secured $4.5 million in seed funding with the aim of revolutionizing cross-border payments. Sending money across borders often involves long wait times, high transaction costs, and unfavorable currency exchange rates. Parallax intends to address these issues by providing a faster and cheaper system for cross-border payments, which can be used for stablecoin, cryptocurrency, or traditional currency transfers.
The company, founded last year, initially focused on assisting remote workers and freelancers in receiving payments from abroad. However, it plans to expand its services to include remittances for migrant workers. Using blockchain technology, Parallax supports users from over 150 countries and boasts near-instant money transfers.
The seed funding round was led by Dragonfly Capital, with participation from Circle Ventures and General Catalyst. Notable angel investors include Balaji Srinivasan, Zach Abrahms, and founders and operators at various fintech companies.
Parallax’s co-founder and CEO, Mika Reyes, hails from the Philippines but immigrated to the United States. Having experienced the challenges of sending and receiving cross-border payments herself, as well as witnessing the struggles faced by her friends in the Philippines, Reyes aims to provide a solution that eliminates the lengthy wait times, high fees, and unfavorable exchange rates associated with traditional methods such as PayPal, Payoneer, or Western Union.
While some freelancers and contractors prefer to receive payments in stablecoins or cryptocurrency due to their speed and low costs, there are adoption barriers for those unfamiliar with these technologies. Parallax aims to bridge this gap by making the customer experience more intuitive, allowing users to receive payments without needing to understand stablecoins or cryptocurrency.
Parallax’s first product enables users to open a virtual USD account to receive funds. Users can be located anywhere in the world, excluding sanctioned countries, and set up their accounts using ID verification such as passports. The company is also planning to introduce the ability to convert USD into local currencies before expanding to support more currencies.
Parallax differentiates itself from competitors by offering faster transfers, lower fees, and enhanced transparency. Additionally, the company has seen significant organic interest from Latin American and African users, prompting the team to focus on these regions.
Cross-border payments represent a sizable market, attracting the attention of several startups and established companies. Parallax’s strategy for competing involves reaching high transaction volumes to justify lowering fees, partnering with compliance-focused organizations, and building the necessary infrastructure for both cryptocurrency and traditional fintech solutions.
The recently raised funding will primarily be used to expand the team and develop the infrastructure required to facilitate faster and cheaper payments for a broader user base.
Sources: TechCrunch, Dragonfly Capital