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Cannabis industry and gaming payments startup Aeropay is now offering an alternative to Mastercard and Visa

Tech Crunch

Cannabis industry and gaming payments startup Aeropay is now offering an alternative to Mastercard and Visa
Christine Hall
4:00 AM PDT • May 16, 2024

Illustration of two people with mobile phones sending coins to each other.
Image Credits: Drypsiak / Getty Images
The key to taking on legacy players in the financial technology industry may be to go where they have not gone before.

That’s what Chicago-based Aeropay is doing. The provider of pay-by-bank solutions for businesses started out helping cannabis retailers and gaming companies with their payments and is now entering into Visa’s and Mastercard’s territory by innovating the payment networks.

Co-founder and CEO Dan Muller has a background as head of product for a company that built digital solutions for brands and retailers. At the time, mobile was coming online, so he ended up building native mobile apps for brands like Best Buy, Adidas and Express, which gave Muller firsthand experience in payments.

“When you peel back the layers of the legacy way to solve digital payments, it was either make it easier to accept the card online, like Stripe or Square, or you could attempt something really grand, which was to go around the system,” Muller told TechCrunch.

With Aeropay, businesses can offer regulatory compliant, cashless and contactless digital payments to their customers, both in-store and online. To do this the company created its own bank aggregator, called Aerosync, that connects bank accounts and enables customizable integrations using open APIs.

It can connect over 12,000 banks, and once the merchant connects to a bank account, they can enable customers to pay just like they would in any e-commerce environment. Merchants can also utilize a QR code for payments and not pay fees on the transaction, or bother with cash. This would allow, for example, the merchant’s customer to choose the amounts to pay and confirming in checkout. If customers are using a digital wallet, merchants choose the amount and confirm a submission to a digital wallet, Muller said.

One of the differentiators to other companies creating digital payment solutions is that Aeropay started with regulatory and compliance as a focus, unlike other companies that started with a product and the compliance “was an afterthought,” Muller said. As a result, he believes merchants are able to minimize return and fraud risk. Aeropay uses Automated Clearing House to facilitate direct bank-to-bank transfers, which means there are no card networks involved. That’s why it’s good for the cannabis industry, which is not able to utilize payment card networks.

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