2023 Product Recap

In 2023, Layer2 Financial navigated a challenging year with the resilience and adaptability that have become part of our DNA. A global banking crisis earlier in the year, the ongoing war in Ukraine, and an ever-changing regulatory landscape, it was a year of many challenges. However, testament to the Layer2 team, the company not only survived 2023, it thrived.

Our ‘Product Recap 2023’ is an opportunity to reflect on progress that has been made in the last year, as we continue our journey to to build the fastest, cheapest, most transparent payments network on the market.

Read on to learn about some of the key themes and features that were the focus in 2023.

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TLDR – Key Deliveries

• Partner Ecosystem Expansion – Integrated with many regulated entities to enhance payments, banking and digital asset capabilities. Partners include; BitGo Trust, Buckzy Payments, Aquanow, Circle, Fortress Trust.
• Multicustodial Resilience – Customer assets are spread across multiple banking partners and digital asset custodians for increased resiliency and security.
• US Payments Enhancements – Added support for customers to do ACH Pull payments in addition to Fedwire and ACH push payments.
• International SWIFT Payments – Customers can now manage international finances with ease through both outbound and inbound SWIFT payments.
• Additional Local Payout Support – Released ability to make payouts in local payment rails in new jurisdictions including India (INR), Europe (EUR) and Canada (CAD).
• UI-Based Tools – Released client dashboard for clients to support onboarding, customer management and day-to-day operations. Also, released a white label customer onboarding application to allow clients onboard customers quickly without having to their own onboarding experience.

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Onboarding:

White Label Customer Onboarding App – We began the year by releasing our white label customer onboarding application. The app allows clients to quickly onboard customers, without having to spend time building their own onboarding experience.

Onboarding Improvements – We were constantly updating and adding new features to the onboarding app including; individual (retail) customer support and the addition of new fields to meet changing compliance requirements.

Identity Card Support – For customers outside the US, we released support to use a national identity card as a valid form of identification.

Customers & Accounts:

Individual (Retail) Support – We released support for individual (retail) customers based inside and outside the US.

Enhanced Customer Details – Clients can now retrieve the complete set of financial and KYC information on the customer object, instead of just on the application.

Statuses – We added a ‘status’ field to both customers and accounts to allow for more robust customer/account management. Clients can set a customer to be FROZEN to prevent them from transacting or set an account to CLOSED if the customer wishes.

Transaction Context – We added additional context to transactions including; category and category id which identify which withdrawal/exchange/… a transaction relates to. For ‘transfer in’ transactions, we provide originator information to provide extra insight into where funds were received from.

Returns & Reversals – We also added new transaction types to handle returns and reversals.

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Deposits, Withdrawals, Transfers:

ACH Pull – We released the ability to execute ACH pull transactions using our open banking provider MX. Reduce returns and fight fraud by verifying external account ownership before ‘pulling’ funds from an external USD bank account into the Layer2 ecosystem.

ACH Push – As well as ACH Pull we also released standard ACH push withdrawals. This allows customers withdraw funds externally using the ACH payment rails.

International SWIFT support – We released support for SWIFT international wire payments. Customers can both receive SWIFT deposits into their USD accounts, or send USD funds internationally using SWIFT.

Readable Memos – Layer2 updated the memos provided on deposits to be more readable. Previously, memos were long uuid values e.g. ’81a…8ka6b’, whereas now they are much easier to read e.g. ‘Layer2 SF5E4F’.

Fees – We released the ability for client to charge inline fees on deposits, transfers and/or withdrawals. Clients can choose from charging customers flat fees or percentage of transaction fees.

Simulate Incoming Fedwire Deposit – In sandbox, clients can simulate an incoming Fedwire payment to support testing of flow of funds in the platform.

Counterparties:

New API: ‘Counterparties‘ – We released a new platform API (/counterparties) to allow clients to create and manage counterparties for each customer. A counterparty is an external entity (corporation/individual) that a customer wishes to send or receive funds from.

Additional Counterparty Types – Starting with the US, we quickly added new counterparty types to represent entities in other jurisdictions e.g. FIAT_EU for ending funds to Europe, FIAT_HK for sending funds to Hong Kong. Each counterparty type uses fields bespoke to the relevant jurisdiction. E.g. FIAT_MX (Mexico) has a field called ‘clabe’ which is the account number equivalent for Mexico.

SWIFTs via Intermediary Bank – We released the ability for customers to optionally specify an intermediary bank when sending SWIFT withdrawals.

Status – Like customers and accounts, we added a ‘status’ field to counterparties to allow clients FREEZE counterparties or update them to other statuses including PENDING, CLOSED, ACTIVE.

Exchanges:

Market Exchange – We released our market exchange API customers can execute market trades at quicker speeds where the price quoted is not the guaranteed trade execution price. This is in addition to the existing ‘quote’ trades where quotes must be locked in before a trade is executed.

Trading Fees – Layer2 added support for clients to charge their own inline fees on exchanges. Like other operations, clients can specify fees as a flat fee or as a percentage-based model.

Webhooks (Callbacks):

New API: ‘Subscriptions‘ – Layer2 released a new platform API to allow clients add and manage subscriptions to callbacks. Previously, this was done manually by Layer2, however now clients can serve their webhook needs themselves.

New Webhook Events – In addition to the application events, Layer2 released a number of other events to provide realtime updates when the status changes on; customers, accounts, transactions.

Client Dashboard:

Client Dashboard – In January, we released our client dashboard that allows clients to manage all aspects of their Layer2 integration via an intuitive UI. Clients can create and manage applications. Clients can review customer details, or open and close accounts on behalf of their customers.

Dashboard Improvements – throughout the year we released many updates to the dashboard including; counterparty management support and the ability to download application documents. Another key improvement was to enable clients to execute deposits, withdrawals, transfers and exchanges through the UI, all without writing a single line of code.

About Layer2 Financial:

Layer2 is a regulated payments infrastructure that enables payment processors, fintechs, neobanks to launch innovative payments products in days. Click here to learn more.

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