COG - A modern connected backend platform for money movement and management


Back in March 2022, after successfully raising our $30 million credit facility from Aura Ventures, Cape needed a bespoke credit management system to manage the complex tasks associated with operating a warehouse funding facility such as;

  • Managing an accurate borrowing base record.
  • Creating credit facility ledgers.
  • Moving money between different bank accounts.
  • Tracking debt covenants.
  • Providing capital reporting back to Aura.

Reimagining a 'System of Record'

For Cape, given our unique operating model we also needed to consider the additional demands of running our own corporate card issuing program as a Principal Member of Mastercard

From a platform design perspective, we needed a single scalable central source of truth that would become our 'System of Record' for all of our customers transactions and balances. Hence the platform needed to be able to:

  • Provide an ability to issue customized physical cards (and soon to be virtual). As well as controlling how and where corporate cards can be used. 
  • Optimize our card program by managing users, card inventory and fulfillment all in one place. 
  • Create ledgers to track transactions and balances.
  • Define custom ledger accounts to track funds.
  • Group customer accounts into categories.
  • Freely allow for the querying of transactions, accounts, entries and more. 
  • Executes payouts programmatically at scale. 

These requirements were on top of the credit management requirements we outlined initially.  

We therefore hypothesized we needed to couple the requirements of both our card program and credit management system together to achieve the most optimal solution for both Cape and our business customers.

Build, Buy or Partner 

Given utilising a complete tech stack that incorporates all of the above elements is a “must have” as opposed to a “nice to have”, we needed to weigh up the age old question of whether to build, buy or partner with a software vendor to provide this solution. 

With innovation in commerce and business models outpacing the existing payment rails infrastructure, combined with a lack of card issueing and ledger management systems that have failed to modernize to support commerce today, we decided it was necessary to build our own solution. 

Building a credit management system intertwined with a customer balances platform might sound trivial, but there is a surprising amount of complexity to be considered before you can successfully launch let alone maintain a solution that is both compliant and scalable. 

And I should know! Prior to joining Cape's founding team as our CTO, I built one of the largest business credit card solutions in Europe in Capital on Tap, who today support over 250,000 Small and Medium Enterprises. Thus providing Cape with a clear understanding of a tried and tested ideal system design blueprint, helping fast-track our journey to a successful launch. 

Reinventing for greater control, security and compliance

At scale, building and maintaining a platform becomes difficult due to edge cases. The final 20% of ensuring payment success and meeting evolving business requirements can consume 80% of our time and resources which we have needed to build into a platform: 

  • Increased support responsibility: Because we hold our customers’ virtual accounts ourselves, we are responsible for servicing them.
  • Increased reporting requirements: Similar to having increased responsibility for supporting customers’ accounts, we also have responsibility for ensuring compliance reporting information and activity to authorities such as the Austrac.
  • Greater responsibility for fraud prevention: Your partner bank can’t see what’s happening within your customers’ virtual accounts. That means it’s up to Cape to monitor accounts for potential fraudulent activity. 
  • Payment authorisation layer: We would need to build, deploy and manage payment authorisation decisioning that could happen in real time. Whether that’s ensuring enough funds are available within the designated cardholders account or if a transaction is within the expense policy.

The outcome: A platform built to keep up with constant change

This is the first time we are publicly unveiling our Back Office webapp that we’ve been building for the past 24 months, aptly named COG (A.K.A. Cape Operational GUI).

Through the use of Third Party API integrations with Mastercard, Thredd, FrankieOne, Placard, Basiq, GoCardless, Codat, Xero and CreditorWatch, we have created an orchestration layer that allows our operations team to underwrite, approve, reject and onboard customers for a Corporate Card application in under 20 minutes.

Whilst having the added benefits of:

  • More control over KYC & account approvals: If you are leveraging another vendor's card issuing license and capabilities, that partner will perform essentially all typical bank services. That means the vendor decides whether to approve certain customers, not you; and the vendor decides what forms of identification it will accept for KYC. This can limit who you can accept as a customer. With Cape’s operating model, those services are performed by ourselves and with the support of other compliance partners such as FrankieOne, which provides Cape with more flexibility based on our specific user base and customer risk profiles.
  • Faster account opening: Because we have control over the process for opening our customers’ virtual accounts, we can do so faster. 
  • Streamlined customer onboarding: From the client application process, to approval and ordering a card.
  • Transparent portfolio management: Comprehensive tooling and analytics to effectively monitor, analyze and optimize our credit portfolio.
  • More latitude to customize and innovate: We chose to hold nominal credit limits on a customers’ virtual account, which means that Cape can collaborate on what features we want to offer, such as customizing repayments terms so that our customers can ‘revolve’ their outstanding balances as opposed to 100% transact at the end of the payment cycle. In the future this might also include Invoice Finance and Embedded Lending products. 
  • Easier to mitigate bank partner risk: No one wants to pick a bank partner and build a successful program with them just to rip it all down to move banks. 
  • Fully automated: Pre-assessment, document generation, deal structuring, credit scoring, data collection and credit memo creation.

Cape: Power up your payments, policies and people

We started building Cape two years ago with the aim of giving businesses back their time and money. 

To achieve that mission we’ve needed to overcome a number of technical feats to create the foundationary infrastructure that would allow Cape to build finance software that guides businesses towards greater financial health. 

Looking back over our accomplishments, I’m incredibly proud of how much we’ve successfully built and delivered for our customers.

Be sure to sign up for Cape today if you are interested in helping your team meet their full potential.

Ryan Edwards-Pritchard

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