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EWise Banks $7.8M For Privacy-Focused Online Payment Service

EWise Systems Pty. Ltd. said it has raised $7.8 million in Series B financing to transform the online-payment industry with its focus on privacy.

Balderton Capital led the financing, with participation from Total Technology Ventures; Australia-based Patagorang, led by Roger Allen; and individual investor Stanley S. Shuman of Allen & Co. Dharmash Mistry, a partner at Balderton, has joined the board of eWise.

The company has now raised $12.1 million over two rounds. Valuation was not disclosed.

The Reading, U.K.-based company has two businesses: a personal financial-management service and an online-payments service.

The financial-management service is similar to Mint, which was acquired by Intuit Inc., or Yodlee Inc., except eWise enables people to download all their transactions to their computer and analyze them on their own devices for maximum security, said eWise founder and Chief Executive Alexander Grinberg.

The service is being used by financial institutions such as Citigroup Inc. and HSBC Holdings PLC's First Direct in the U.K., Ping An Insurance Company of China Ltd. and Westpac Banking Corp. in Australia.

"The way we do it is different because...there's no need to disclose user IDs. The aggregation is all done client-side," Grinberg said. "All information is encrypted in their device. It's our focus on privacy."

Now the company is preparing to launch its payment service in the U.S. The service is designed to make it fast, easy and secure for consumers to pay for bills and products online.

Consumers can click on a button when purchasing something online and will be able to select from a list of participating banks. If they have an account with one of the banks, they can click to pay directly from their bank account.

EWise will enable banks to complete the transaction on the spot. Consumers will not have to sign up for an account with eWise.

"You've made a payment direct and not given any personal financial information," Grinberg said. "You do not have to register separately. You do not have to maintain and operate a separate account."

Both the merchant and the bank pay a small fee, about 6 cents each, for the transaction.

The eWise service costs less than credit card transaction fees, which are known to cost about 2% to 3%. In addition to transaction fees, eWise also avoids chargeback costs, the costs of products that are not paid for by consumer for various reasons, Grinberg said. This is because with eWise the bank makes a guarantee of payment with the transaction, Grinberg said.

Grinberg said he does not see eWise as a direct competitor to credit cards or PayPal, because he sees eWise replacing cash and checks, which are both much more costly for banks to process.

"We think PayPal is going to be both a beneficiary and competitor," Grinberg said. "A beneficiary because using [eWise] is a very effective way of funding a [PayPal] eWallet account."