B2B Payments

Taking The Mystery Out of Cross Border B2B Payments

It’s not all that easy to make payments to another business across borders, especially for SMBs. The process tends to be opaque and costly. The Currency Cloud is a small start-up with a big idea: fixing this for businesses of all sizes. PYMNTS caught up with their CEO to talk about how they plan to solve this problem and who else might have their sights on this international payments stage.

When business that wants to make cross-border payments to another business things have historically tended to get complicated and opaque. In the past this left companies, particularly those of the small-and-medium sized variety, largely in the dark most of the time about exactly how much money was going out the door every time they paid an international bill. The Currency Cloud is a small London-based start-up with a big goal: taking the mystery out of international payments. PYMNTS caught up with their CEO about the challenges and rewards of creating a better marketplace and indulged in some speculation about whether Facebook has a future on the international payments stage.

Currently, says Mike Lavin, CEO of The Currency Cloud, about 85% of payments are done through banks. While large enterprises can generally negotiate favorable pricing and greater transparency, smaller enterprises enter the space with a much more shadowy understanding of the real cost of making payments and with less ability to negotiate for concessions. The Currency Cloud discloses all the information about the fees, including what they make, the businesses make and how all the exchanges rates and taxation effect what the overall payment is. They offer this paired with a user-friendly interface, so that payment is easy to navigate and itemize.
(Jump to 4.36) “Small companies, small businesses and medium sized businesses, don’t get the same pricing or the same rates. And as we talk to people, and remember we’re still a small company, we’re a start-up, I like to think we punch above our weight…but we hear from small and medium businesses all the time that they’re overpaying and that what they are doing is hard to use. For what we’re doing it’s not a question of competing with other small start-ups for the most part…it’s really providing as simpler better service to a series of businesses that are underserved by the banking industry.”
Though new to the marketplace, The Currency Cloud is pushing in at a driving pace. The company is processing $4 billion in payments annually, is serving 100 platforms and is available in 212 countries worldwide. They have also been successful fundraisers, bringing in nearly $20 million in VC investment. Their most recent round brought in an additional $10 million. The new infusion of cash will go toward R&D and making a stronger push for the business in the market place.
The company has also been mentioned in the speculation that Facebook might be making a push into the payments industry—the social media giant has been in rumored talks with payments start-ups across London, though there are no reports on exactly to what end.
Lavin said that while it makes sense for Facebook to make a payments push given their number of users, his company is in no direct talks with Facebook at this time.
(Jump to 7.31) “First of all, I have never met Facebook, ever… I think if you have all of the users it makes sense to explore how are you going to use their connections with each other…It does make sense to see Facebook in the payments business in some way, but don’t really know anything beyond that.”
The Currency Cloud continues its push and hopes to see a large expansion in 2014.

To hear the full PYMNTS discussion with CEO Michael Lavin click here.

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Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border. Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

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