Former Simple Bank Co-Founder Unveils New Blockchain Payments Startup

A new startup launched by the former co-founder of Simple Bank wants to provide early-stage fintech startups with traditional banking service functionality.

Sila, founded last year and until now operating in private alpha test phase, unveiled an open beta Thursday, inviting developers of fintech firms - including blockchain and crypto startups - to begin building new tools using its API. The startup describes itself as an "All-inclusive API platform" for fintechs and other projects looking to modernize the financial space.

Specifically, the startup connects existing payment systems, such as automated clearing house rails, with smart contract functionality on the ethereum network for businesses that have difficulty receiving banking services on their own.

Sila co-founder and CEO Shamir Karkal, who co-founded Simple before BBVA acquired it for $117 million in 2014, told CoinDesk that the startup, which stores its own database using the public ethereum ledger, generates tokens for customers to use.

"If you've ever talked to anybody who's built a fintech startup and launched it, they've all had sort of the same horror story: 'Hey I had this product and launched it and then I learned about banking and what a horrible process it is,'" he said.

Karkal did not have a firm timeline for this phase of the startup's operations, but told CoinDesk that he was "Penciling in roughly six months," with a full launch planned for Q4. In that time, the company hopes to add in new features and incorporate feedback from developers, as well as support a wider array of payment rails.

Justin Thomas, a Sila alpha customer and the founder of Friendowment, a startup that helps individuals share their savings, told CoinDesk via a spokesperson that being able to directly access a stablecoin while also using a traditional API "Is immensely powerful."

His startup allows groups' members to share financial assets between them, with each asset being customized for the group using it.

In other words, Sila has found a way for his startup to efficiently use a blockchain while still delivering its services, Thomas said.

The startup charges a 0.4 percent fee for transactions during its beta program, Karkal explained, which he added appears reasonable in comparison with other payment platforms.