Currency Cloud CEO: “New Finance Is Here To Stay”

The Currency Cloud has added its name to the growing list of alternative international payments providers cropping up in the recent months. Currency Cloud is rivalling with traditional financial institutions to provide cross-border transfers at affordable prices. PYMNTS.com organised a Q&A with the company’s CEO Michael Laven to find out what services they provide and discuss the evolution of the international money transfer market.

First things first, can you tell us what the Currency Cloud is all about?

The Currency Cloud delivers a simple, transparent and low-cost international payments solution for businesses worldwide. Businesses can access our capabilities through our online front-end or via their own front-end via our API. They can also choose to extend our capabilities to their clients, branded in their own identity, for example, to complement their existing services or to augment their existing domestic payment services.

We tell our customers exactly how much we are earning on each currency conversion – agreed up front and applied consistently throughout. We show them the interbank mid-market rates so they can verify that we are true to our word. This level of transparency was unheard of in cross-border payments before we came along. SMEs, money transfer organisations, treasury application providers (such as e-invoicing or accountancy software companies) and financial institutions (such as banks, brokers and IFAs) are just some of the firms that engage with The Currency Cloud. We service both the new and old world of financial services.

According to a recent piece by the Telegraph, “the” new way to send money abroad is via a currency broker, how do you rival with such services?

Far from being a rival to currency brokers, The Currency Cloud supports brokers and underpins their international payments services. For example, Edinburgh-based fixed income broker RM Capital uses The Currency Cloud to facilitate low-cost international transactions for its customers, improving FX transparency and efficiency. We white label our services to an array of brokers like RM Capital, wealth management firms (such as Liberty Wealth Management) and money transfer businesses (such as TransferWise) so that they can make cost-savings, increase revenue, and deliver better services to their customers.

Do you think Europeans are ready to abandon traditional cross-border payments service providers like banks?

Let’s be clear: banks are not going away. They are an essential to the financial services industry and vital for the global economy to function. However, they will increasingly move towards focusing on core capabilities where they benefit from high barriers to entry and economies of scale – taking deposits, capital markets and operations.

Banks charge sizeable fees on international payments and money transfers for both consumers and businesses. As a consumer, if you want to change money or make a cross-border payment through your bank, you will undoubtedly get ripped off. Your bank may tell you that it’s charging no commission, but it will be making frightening margins in the spread (the difference between the interbank exchange rate on the currency fair and the rate you receive).

Banks give terrible exchange rates to all but the largest corporates, charge a fee for sending your payments through the correspondent banking network and charge more fees if there is a problem with your payment (which happens frequently). Worst of all, you seldom know when your payment will reach the recipient, making forecasting and invoicing very tricky indeed. Businesses around the world deserve better, this is where The Currency Cloud becomes the discerning choice.

How much do you think the traditional finance market will change? Are smaller players here to stay?

Financial services is undergoing a remarkable transformation. A swathe of financial technology firms has emerged to address the issues presented by the banking sector. ‘New Finance’ companies are concerned with low costs, transparency and efficiency for their customers. They focus on being good within particular niches of the financial services value chain. From cross-border payments firms like The Currency Cloud to entirely new banks such as Fidor Bank to entirely new verticals such as peer-to-peer loans (think Zopa for consumers or Funding Circle for businesses), New Finance is here to stay.

In Europe SEPA will make cross-border transfer easier and much cheaper between European countries, what do you think that means for companies like The Currency Cloud?

Recent research by Experian demonstrates how unprepared businesses, and, crucially, banks are for SEPA. The main objective of SEPA is to make cross-border payments within the Eurozone as cheap and efficient as domestic payments. To make a SEPA payment, the person or business transferring the money must have a Euro account. Subsequently, anyone converting from other currencies into Euros cannot take advantage of the low transfer rates. To compound the problem, some banks have still not connected to SEPA and are still charging wire transfer fees across borders for Euro to Euro transfers.

Customers of The Currency Cloud are not affected by these issues. Our Euro to Euro transfers can be made via SEPA. What’s more, we can even convert other currencies to Euros and send via SEPA. For example, a customer of The Currency Cloud converting GBP to EURO destined for Germany can send the Euro payment via SEPA and lower their transfer costs whereas a bank would charge them an expensive wire transfer fee. In addition, our beneficiary validation helps to minimise payment errors as businesses migrate to the IBAN format of beneficiary details from local bank account details.

What is on the cards for The Currency Cloud over the next couple of months?

Our XBPConnect API enables our strategy of putting international payments at the source of the transaction. There is always a reason why someone might need to transfer money overseas, for example to pay a supplier, and we want the international payment to be as embedded as possible into the core transaction process, not a disruption to it.

Today, businesses which need to pay their foreign supplier will need to dis-engage with their treasury process and applications to call a broker or bank to make the payment. We believe that making the international payment should be as easy as making a domestic payment. Two services, developed by independent 3rd party software vendors are launching in February (available via the relevant app exchange) that integrate our capabilities directly into Sage and Salesforce. A couple of clicks and the international payment is made and all the data relating to the payment, such as beneficiary, domestic value, and the updates to the treasury applications such as in the purchase ledger, are automatic and seamless. Other applications and integrations into business applications will be coming to market over the next few months that will make international payments significantly easier for businesses.

Where do you see the European payments market heading in the next few years?

The European payments market is in a state of flux. The traditional players in payments will start to become marginalised as consumers and businesses vote with their feet and switch to the digital finance payments companies. This digitisation of finance ultimately allows new business to erupt at every level of the financial value chain, leveraging cutting edge technology to give customers the services they deserve as opposed to services they have to accept.


Michael Laven – Chief Executive Officer, The Currency Cloud

Mike steers the ship in its voyage to deliver transparent, low-cost and accessible currency conversion and payments to the global business industry. Mike demonstrates his strategic guile over and over again; he really understands how to build a successful business. He nurtures his team to deliver their best and is an inspiration through his own work ethic.

Mike has worked in Financial Services for nearly 30 years. He has successfully led a multitude of Fin tech firms as CEO or Chairman for 15 years. These have included Infinity Financial Technology, Iris Financial (Front/Middle office trading & risk management platform and applications) and FRS Global (compliance and risk management solutions). Prior to joining The Currency Cloud, Mike was Chief Operating Officer of Traiana, a subsidiary of ICAP Plc. Traiana was founded in 2000, and Mike helped lead the firm to become the industry-standard for electronically processing over-the-counter FX, exchange traded derivatives, CFDs and cash equities trades. It became the leading platform for connecting all market participants to automate post-trade processes, reducing the risk and cost of trade processing. He was a key figure in the negotiations that culminated in ICAP Plc purchasing controlling interest in Traiana for $247million in 2007.