After many months of working behind the scenes in stealth mode, the Omnumi team is thrilled to finally publicly launch our platform.
We had the chance to sit down and chat with co-founder and CEO Kirk Chapman, whose deep experience with not only banking systems and payments but also blockchain technology uniquely positions him at the convergence of the old and the new.
Kirk walks us through his time re-opening consolidated banks over weekends with the Fed during the financial crisis to the challenges of sending funds to non-profits in India to helping Square Cash’s first product leads develop their initial use cases.
Along the way, he provides insight into what exactly Omnumi is, how it can help businesses and governments — and ultimately end users, today and over the long run.
The following is a truncated and edited version of that conversation.
Hey Kirk! Let’s address the elephant in the room. What exactly is Omnumi, anyway?
Kirk Chapman: Omnumi is an identity and compliance first digital wallet platform. We’re providing a way for companies to build digital wallet experiences in a way that’s safe, secure, and compliant. With Omnumi, US-dollar backed assets are globally accessible, and payments are settled instantly for minimal fees, 24/7.
Our platform is also non-custodial in that we don’t hold the keys to your wallet, and we can’t move your money. Instead, we’ve hard coded compliance and tiered risk limits into the ledger, which is based on your digital identity. The money is in the user’s custody, and they can do what they want with it.
The long term vision is to enable businesses and governments to provide cheap digital payments and global remittances in a safe and compliant way, allowing them to bring more people into the global financial ecosystem.
Ultimately, companies can facilitate their own use cases and leverage blockchain to move money. We’re not targeting individuals, but at the end of the day, it’s always all about how you can benefit the end user.
It does seem like our legacy payment systems are due for an upgrade. But let’s take a step back for a moment — tell us a little bit about Kirk, who you are, where you came from.
I was born in Anchorage, Alaska; I lived there for about 20 years. Growing up, I spent a lot of time mountain climbing, and over the years, I’ve spent a lot of time traveling and mountain climbing in different places. I have two kids, and I currently live in Greenville, South Carolina.
During the financial crisis, we were working with the Fed and consolidating banks in the Southeast, which was a wild time. They’d let us know on the phone Friday afternoon that a bank was going to be consolidated, and we would help them re-open Monday morning as a completely different bank with updated technology and systems.
In 2002, I started a company that was a managed server provider for banks. A lot of banks at that time were transitioning from on-premises servers to cloud-based processing, which was still a very new thing.
During the financial crisis, we were working with the Fed and consolidating banks in the Southeast, which was a wild time. They’d let us know on the phone Friday afternoon that a bank was going to be consolidated, and we would help them re-open Monday morning as a completely different bank with updated technology and systems.
A few years later in 2012, one of the banks that we managed was taken over by some investors in New York, who decided to build out a white label payments platform. They asked me to build the technology for them, so I spent a couple years developing that platform. We stood that up in 2013, put some APIs on top of it, and built out this full service platform. You could open a bank account, fund the account remotely with a debit card, and transact — all in under two minutes.
I took some time off in 2016 and 2017; I went to community college and learned how to weld. I got into working on old motorcycles for about a year. Then I got a call from a friend who was running a company called Let’s Talk Payments. Eventually the name changed to MEDICI Global, and I became Head of Product.
I ended up joining SoFi shortly after; they needed me to run all their operational technology and assist them with shoring up the banking core they were using in an effort to earn a bank charter. I became Advisor to the CEO, and after we received our bank charter, we acquired a company called Galileo, a peer-to-peer payments company at the time. We then acquired Technysis, a very modern banking core, at which time I became Head of Strategy for Galileo.
What was it that attracted you to banking systems and payments?
The traditional banking space became super exciting around 2012. Bank tech and security was rapidly changing, and I was sort of in the right place at the right time, particularly in the context of the Southeast region. I was speaking to a lot of local banking groups, in the middle of conferences, discussing security, talking about on-site platforms and networks, etc.
The entire payments infrastructure is built on antiquated technology. If you go back thirty years, we didn’t know who the sender was, who the recipient was, or if the funds were missing or not. For much of the world, that $50 fee has a hugely personal impact.
In terms of payments, that whole world is so fascinating to me. We’re paying for things constantly, and everything you do is associated with a payment. It’s not just about how payments are settled or preventing fraud, it’s more about how money is moving through the world, today. It really makes you think — the fact that I can talk to somebody from India or Europe in real time relatively cheaply, and yet payments, somehow, still cost a ton of money and move slowly even though they run on the same digital technology we use to communicate.
For a while, I was involved with an orphanage in India, and it was incredibly frustrating to wire them money and lose $50 on the fee just to facilitate what was essentially a digital transaction. It’s not surprising if you’ve looked at how things work on the backend.
The entire payments infrastructure is built on antiquated technology. If you go back thirty years, we didn’t know who the sender was, who the recipient was, or if the funds were missing or not. For much of the world, that $50 fee has a hugely personal impact.
Traditional banking and blockchain can sometimes seem at odds, with the former discounting it or the latter talking about replacing the old guard. What led you to take that leap — from stodgy banking and payments to the stuff the kids are talking about? And how do you see those two worlds coming together?
It wasn’t an overnight epiphany or anything like that. Throughout my career, we’ve been looking at how to facilitate a more personalized banking experience, figuring out how to allow non-bank entities to perform banking transactions. To achieve that, we’ve always had to look toward new tools and systems to work with our existing products.
When it came to Omnumi, it was natural to say, “Okay, here are the technologies I’m already familiar with. How can we leverage them toward everyday life and provide real utility for people and the world?”
For example, in 2013, we were building a white-label banking and payments platform, and what we found was that none of the three major U.S. banking cores could perform the functions we needed. As a result, we became the first U.S. installation of the Temenos T24 platform, which M-Pesa had just launched in Africa. As we know, M-Pesa was able to leverage that platform to facilitate non-traditional payments across the continent, expanding access and opening up new markets.
When I became Head of Strategy at Galileo and was working as [SoFi CEO] Anthony Noto’s adviser. We wanted to know what the next big thing was, and where the space was headed, which is when I started a deeper dive into blockchain technology. Not just the wonky stuff like how Proof of Work or Proof of Stake consensus systems work, but also the business models behind the industry. I still have a copy of the paper I wrote that explains how Binance makes money.
In the early Aughts, it became clear that we needed to rethink how banking and payments systems worked in the context of a digitized society. Fast forward twenty years, and it feels like we’re at the beginning of another cycle.
So when it came to Omnumi, it was natural to say, “Okay, here are the technologies I’m already familiar with. How can we leverage them toward everyday life and provide real utility for people and the world?”
So in a sense, it’s really more of the same for you — applying the latest technologies in order to deliver the best possible end user experience. How do you see blockchain fitting into that picture?
The blockchain is the foundational technology that provides the Omnumi platform the capability to address real world issues that involve compliance and identity. It allows money to move in a way that guarantees a higher level of confidence between the sender and recipient of each transaction.
We provide a platform that mitigates concerns about terrorist financing, weapons proliferation, drug trafficking, or other nefarious activities because identity compliance rules are baked into the ledger itself.
Imagine you’re a migrant working trying to send money back home in order to pay your mortgage, give money to a family member, and pay your utility bill. Unless there’s someone you trust on the other side that can help facilitate the distribution of funds, you would need to send three separate transfers that cost $50 a piece. With UL, you’ll be able to instantly transfer those funds and have full control over how they are disbursed, while having full transparency over each transaction to ensure your money has gone to the intended destination.
With blockchain, we move that process upstream, and the sender can know exactly who the recipients are — that each person received the right amount of money without relying on an intermediary. This reduces fraud, cost, and the amount of time it takes for the funds to reach each recipient.
Omnumi can also help bring countries who are on Financial Action Task Force (FATF) gray lists into compliance. We provide a platform that mitigates concerns about terrorist financing, weapons proliferation, drug trafficking, or other nefarious activities because identity compliance rules are baked into the ledger itself. For such countries, that can mean improved standing on the global stage and greater participation in the global financial system.
Crypto has been dominating the headlines over the last few months. Should we be worried?
The criticism and skeptical attitude towards crypto is absolutely deserved. When somebody steals billions of dollars and does it through a vehicle like crypto, then it’s definitely understandable for people to question whether this is actually a good thing. On top of that, the fact that the design of crypto prioritizes anonymity and has implementations like mixers to ensure that nobody knows who’s sending what to whom, I think it’s reasonable that people question what’s really going on.
Blockchain provides scalability, immutability, and transparency that databases don’t. It also allows us to write very specific smart contracts that account for rules and risk limits regarding compliance, and it allows us to determine how wallets should act on-chain.
However, what the Omnumi platform is doing is about blockchain, and I believe that blockchain has a tremendous amount of credibility as a technology. Since the infrastructure we’ve chosen to build on is permissioned, we own and control the nodes and validators. We’re working off a concept called Proof of Ownership rather than Proof of Stake, Proof of Work, or Proof of History, which are more common blockchain frameworks.
While our approach might raise some concerns with people in the DeFi space, who believe things should be more decentralized, the reality is that the space we’re in is one that is highly regulated. That’s why we feel the need to own the nodes and validators — we can’t risk a bad actor compromising 51 percent of the network, and having something take place on-chain that shouldn’t.
People might also wonder why we aren’t just using a regular old database that’s centrally controlled if we’re going to run a permissioned blockchain. The answer is pretty straightforward — blockchain provides scalability, immutability, and transparency that databases don’t. It also allows us to write very specific smart contracts that account for rules and risk limits regarding compliance, and it allows us to determine how wallets should act on-chain.
I could be wrong, but I strongly believe crypto and blockchain are here to stay. With that said, what we’re doing with Omnumi crosses the chasm — with blockchain on one side and compliance on the other.
For regulators, our wallet solutions are fully compliant, which we can prove on-demand in the context of requests or audits.
It sounds like with this permissioned blockchain approach, you get the best of both worlds — the technological benefits of blockchain with safety and security of a compliant approach. You’ve also mentioned that this is a non-custodial platform. Can you elaborate on what exactly that means?
A lot of people conflate blockchain and crypto — and use them interchangeably. Similarly, people conflate things like the Apple Wallet or Samsung Wallet with the kind of digital wallets we work with that interact with a blockchain.
The Omnumi platform is fully non-custodial. We don’t own your keys.
A digital wallet is simply an address on a blockchain that shows where assets are held, and who owns those assets. It’s the interface that sits on top of the blockchain, and allows you to interact with it.
That’s different from a wallet that’s on your iPhone that just has a Chase card sitting in it or whatever payment vehicles you have stored. Really, there’s two fundamental differences.
First, digital wallet activity is transparent and immutable. You can see exactly what transactions are happening in a digital wallet very easily. Since ledger entries are cryptographically hashed, no one, not even the Omnumi platform, can change or manipulate past transactions.
Two, when a digital wallet is non-custodial like the ones that will be on the Omnumi platform, it means that we, as a provider of that service, cannot actually move funds from that wallet because we don’t have the private keys associated with it.
If you look at some of the notable cases in crypto like FTX, where people have had money stolen out of their wallets, it’s because their wallets were operated by a custodian, which adds a layer of risk. The custodian owns your private account keys so if they take your money, your money is gone. For example, FTX had complete control to put their customers’ funds wherever they wanted because they owned all the keys.
That’s also the case with Chase and Wells Fargo — they’re custodians of your deposit because your money isn’t actually sitting in a bank branch. It’s on loan to somebody else.
But the Omnumi platform is fully non-custodial. We don’t own your keys.
We’re a fully compliant platform, but if you end up doing something illegal, we actually can’t take your funds. All we can do is stop payments to and from the wallet. We would recognize and flag that a wallet is performing an action that violates our terms of service, and halt transactions from being able to take place thereafter.
There’s a sense of idealism, being able to have ownership and control over your own money and assets. But what happens if there’s fraud — someone steals my money or my keys?
With ownership comes responsibility — it’s up to users to properly manage their funds. But there are also pathways to correct wrongdoing in a non-custodial environment.
You’re never going to completely prevent fraud, but we can make it really unattractive to commit it in the first place or to commit crimes on our platform — and it all comes back to identity. Our approach is based on tying compliant identity to access.
If someone defrauds you, and you send them money, we can’t move that money back to you. What we can do is prevent that wallet, the one that received your funds, from transacting any further. Ideally, this will prohibit people from committing fraud in the first place because what good is the money you stole if you can’t move it or transact with it afterward? From there, we would cooperate with law enforcement in an effort to get those funds returned.
In the case that you are trying to commit fraud, we know what transactions are true and accurate because of the blockchain. It would be more difficult to make some kind of false claim. For example, if an insurance company sends funds to a user, and that person claims they never received the money or that they received an incorrect amount, we can see exactly what happened on the blockchain.
You’re never going to completely prevent fraud, but we can make it really unattractive to commit it in the first place or to commit crimes on our platform — and it all comes back to identity.
Our approach is based on tying compliant identity to access.
For example, if someone is trying to launder money or fund terrorism, then they probably aren’t going to want to reveal much about their identity. At Omnumi, that would mean you aren’t going to be allowed to move much money around. In contrast, honest persons with thin but not yet robust digital identities, will be allowed on the platform to prove themselves and make small, but meaningful, transactions — perhaps hundred of dollars a week. This framework and model massively improves financial inclusion while at the same time makes it really unattractive to act nefariously.
All of that sounds great, but why should businesses care?
They should care about what we’re doing because Omnumi provides a platform that can provide real utility to their customers. Any time there’s a remittance, there’s a bunch of operational costs associated with it.
Blockchain isn’t a magic bullet that will solve every business’s problems, but there are certainly a number of cases where this solution will work very well.
And if fraud occurs, that costs businesses a lot of time and money to fix — not to mention reputational risk. In addition, the fines associated with non-compliance and facilitating bad behavior are very high. We can help them avoid these situations.
I would add that it will still be a case-by-case basis to a degree; some use cases will be better suited. Blockchain isn’t a magic bullet that will solve every business’s problems, but there are certainly a number of cases where this solution will work very well.
What does this ultimately mean for end users?
To be clear, we’re not a B2C company. We will never provide a wallet for users directly. We provide APIs to developers to build secure and compliant digital wallet experiences based on identity.
Imagine a natural catastrophe happens on a Friday night and within seconds a person can download a wallet, have a digital token disbursed to them and full functionality to pay their bills and begin to get their lives sorted Saturday morning — all with full auditability that provides a benefit and at the same time can reduce fraud.
This means that a government can build and provide a wallet that brings their citizens into a financial ecosystem and can provide them with benefits and financial resources without having a banking relationship.
Imagine a natural catastrophe happens on a Friday night and within seconds a person can download a wallet, have a digital token disbursed to them and full functionality to pay their bills and begin to get their lives sorted Saturday morning — all with full auditability that provides a benefit and at the same time can reduce fraud.
We’ll be able to facilitate transactions for somebody living in the U.S. who is trying to send money to another country like Mexico. They can make sure their rent and utility gets paid without having to send multiple wire transfers. Money becomes available in real-time and at a fraction of a cost.
These capabilities provided by the Omnumi platform not only enhance financial inclusion but also open the door to new types of financial products individuals can use in their daily lives.
What are you most excited about going forward?
I’m very confident that in the next 12 months, at least two of the use cases I’ve discussed — facilitating cross-border payments and government distribution of funds — will be in pilot. We’re actively having discussions with governments and businesses regarding those use cases.
It means we’ll be providing people with greater access and more control over their funds enabling the world to move money globally in real time with confidence — that’s going to have a huge impact.
What’s most exciting to me is enabling people to make the most of the money they’ve earned and having access to the global financial ecosystem. We’re going to build something that is truly going to impact people’s lives in a positive way.
Even though we’re building a platform for businesses, we ultimately want to make the world a better place. At a macro level, it’s about people. If we can enable people to access a modern financial ecosystem and at the same time prevent terrorist financing, trafficking of drugs and people, weapons proliferation — that would be pretty awesome. That’s our intent.
It means we’ll be providing people with greater access and more control over their funds enabling the world to move money globally in real time with confidence — that’s going to have a huge impact.