What is TessPay

The Industry

The global telecommunications industry is comprised of approximately 10,000 companies, of which about 1,200 corporations are Major Carriers, often publicly traded, and the other 8,800 entities are Smaller Carriers, generally private companies. The Major Carriers deal directly with the public and the Smaller Carriers, whereas the Smaller Carriers have more limited dealings with the public and often deal mainly with each other. Dealings between telecommunications carriers are called “Wholesale Telecom”.





The Problem

The Wholesale Telecoms segment of the industry is fraught with a series of issues that constitute an impediment to a more orderly and fluid conduct of business.


Wholesale Telecom is a high volume low margin business, with margins often as low as 2%. Credit losses can seriously harm a Smaller Carrier’s cash flow, profitability, solvency and, in extreme cases, viability. Most transactions are international with another Smaller Carrier in a foreign jurisdiction, making financial risk assessment difficult, time consuming and expensive.


There are occasions when customers build up trust with a supplier leading to ever-increasing credit limits only to eventually default either through deliberate fraudulent activity or from an honest inability to pay. Owing to the chain of intermediary companies in many cross-border calls, a default level or two below in the chain can reverberate through all the entities above with attendant adverse consequences for those extending credit down the line.


Legal remedies for breach of contract or non-payment are expensive and cumbersome to pursue with no assurance of eventual payment. Credit insurance, where available, is expensive and the recovery process arduous and lengthy, without any great certainty of recovery if a dispute between the parties underlies the collection issue.

The Solution

The name Tess is an acronym for Transaction Escrow Settlement Service. The company, Tess Inc was incorporated to develop a general escrow settlement service with an initial focus on the global telecom industry. The TessPay solution was designed to overcome the problems identified above.


The essence of the approach is for the industry to adopt a lender funded pre-payment process, whereby all parties to a cross border call have guaranteed assurance of payment within terms, inclusive of the lender to the transaction. Under this business model, each of the parties to a cross border call, excepting the Major Carrier, will prepay any party down the chain for minutes purchased thereby eliminating the credit and collection issues that accompany the present approach to settling transaction values in successive layers of the call. The Smaller Carrier dealing with the Major Carrier will grant that party credit on normal 30/30 terms for minutes sold to the Major Carrier and look to a lender, to the extent required, to fund the payment it will, in turn, make to the next party down the chain for purchased minutes.


In practice, transactions between the carriers will occur using TessPay Smart Contracts and settlement prepayments will be made using fiat currency held within TessPay Multi-Currency Wallets, which will be attached to the TessPay Smart Contracts.


Under this structure, at the end of each 24-hour period, when the Major Carrier consumes minutes purchased in accordance with terms of the smart contract, all the participants in the chain will see a release into their wallets of fiat currency. Their TessPay Multi-Currency Wallets, allocated and attached to their TessPay Smart Contract, will have these fiat balances available to enter either, other TessPay Smart Contracts or, at any time, request a withdrawal by bank wire transfer for fiat currency through the Depository.

The Benefits

The benefits to our users include, and are not limited to, liquidity, payment assurance, secure cloud based switching, lower costs, and fewer technical resources to operate switches. Business users will benefit in cost reductions by eliminating a lot of time issuing and managing new rates and interconnections.


This means there is no need to be constantly focussing on cash flow, instead TessPay users can focus on their core business providing profitable high quality stable routes to their customers. Smaller carriers will benefit from the increased liquidity and payment assurance afforded by the TessPay system. Lenders will be willing to lend without having to evaluate the creditworthiness of the smaller carrier, relying only on the financial strength of the Major carrier.


The TessPay system requires prepayment of all smart contracts, which enables automated payments to be distributed daily to each carriers Multicurrency Wallet without fail.


TessPay will operate cloud-based highly redundant tier-1 carrier-grade telecom switches. Carriers on the “edge” of the network; namely, Originators (typically major carriers), and final Terminators (typically facilities-based operators) will continue to operate their telecom switches as they do currently.


Security will be significantly increased over the current environment, as in addition to the IP address and prefix security, the TessPay switches will operate behind a firewall; carriers will only add permissible IP addresses to the system directly, eliminating the ability for social-engineering fraudsters to gain unauthorized access to “live ports”.


Smaller carriers will no longer be required to operate their own switch; all calls will pass through TessPay’s hosted switching platform. There will be no additional cost for this service, passing significant saving onto the smaller carriers by reducing or eliminating the need for switching hardware, software licenses, soft-switch ports, billing systems, data center hosting, technical support, etc.


All features that are currently enjoyed by a carrier utilizing their own switching platform will be available in TessPay’s hosted platform. Existing technical resources can then be redeployed to focus their attention on call quality.


The TessPay system will allow sales staff to discover that smart contracts eliminate the need to send, receive, upload, and confirm rate amendments; initiating and responding to offers will be virtually at the “click-of-a-button”.


Administrative and accounting staff will appreciate the automated invoicing and robust reporting, and management and owners will no longer have to worry, nor allocate time-consuming cycles to cash flow matters.


Major carriers will benefit from higher quality and more stable sources of supply owing to the significantly increased liquidity and financial stability of the smaller carriers resulting from their use of the TessPay system.