Thinking Globally, Acting Locally For Cross-Border Payments


Align Commerce’s recent entrance into Brazil just ahead of the 2016 Summer Olympics in Rio is no coincidence. The company, which uses a hybrid of blockchain technology and other payment rail infrastructure to enable cross-border payments, said it will look to capitalize on the demand spike for global payment services during the Olympic games, where hundreds of thousands of people will flock from all over the globe.

Align Commerce took advantage of local events when it entered China earlier this year, launching its corridor to coincide with the Chinese Lunar New Year.

Strategically timing entry into a new market is good business sense. But when these events pack up, how can a payments technology firm stick around?

According to Align CEO Marwan Forzley, servicing cross-border payments needs is about understanding what corporates will want in a particular market.

“When making the decision of where to expand, it is important to figure out where the biggest deltas are between what client experience exists before we enter a market and what we can bring to the table using our new payment rails,” Forzley explained in a recent discussion with PYMNTS.

For instance, in Brazil, the Olympics presented an opportunity to capture a new market that couldn’t be passed up.

“The Olympics are obviously a big deal and will shine a spotlight on Brazil in the same way the World Cup did in 2014,” explained Forzley, adding that the country poses a “great opportunity” for the company.

With an explosion in travel and tourism hitting the market ahead of the Olympic Games, the executive said word of mouth will be key to getting Align off the ground among businesses in Brazil, where cross-border payments typically require companies to manually fill out bank wire forms and are forced to pay extra fees and spend more time waiting for a payment as it bounces between corresponding banks.

But when the closing ceremony is through, Forzley said Brazil will still be a hotbed of demand for corporate global payment services.

The executive noted that, as the world’s fifth-largest nation by both landmass and population — as well as one of the world’s largest economies — the particular market conditions of Brazil make it ripe for disruption.

“It has encountered strong headwinds over the last few years, which have contributed to a fall in exchange rates of nearly 50 percent over the last year alone,” Forzley stated. “A slowing economy at home and a significant weakening of their currency naturally leads Brazilian businesses to look to overseas markets, particularly to the U.S.”

These characteristics diverge from those in China, but the nation has been key for the company just the same, Forzley said.

While launching in China is “huge” and “very satisfying” for the company, its CEO said, there are particular hurdles for this region that need to be addressed.

In China, he said, barriers exist in both the linguistic and cultural sense. “We can enter the market via U.S.-based companies and see our business expand by word of mouth in China,” Forzley noted of his firm’s strategy in this space.

China and Brazil may require different approaches to service local businesses’ international payments needs, but the Align executive noted that there are a few similarities among corporate clients regardless of geographical market.

For instance, corporations today are concerned about more than just the cost of cross-border transactions.

“We expected people to say that price was their top concern,” Forzley said. “However, once you remove questions around what the actual cost is — by being transparent — other factors come to the fore, like speed, tracking and simplicity.”

As a company that integrates a not-yet-mature technology, the blockchain, into its solution, Align is also tasked with meeting some skepticism. But Forzley explained that reaction to this infrastructure has actually been pretty open.

“While there are always concerns over new technology, people are willing to give it the benefit of the doubt when they see the benefits it has to offer,” he said.

The world over, blockchain is winning over financial institutions and corporations once doubtful of its potential and is seeing massive investments as industry stakeholders anticipate an overhaul of the global payments system. But the technology is still worlds away from being universally accepted and implemented.

According to Forzley, that means the unique conditions of each market, from Brazil to China to everywhere else, will be instrumental in encouraging adoption of blockchain technology.

“The expectations of businesses and consumers transacting globally are driven by improving domestic experiences,” the CEO said, pointing to the U.K.’s Faster Payments initiative as an example of local characteristics that drive global change. “They are creating a similar demand for international payments. Whether this is met by a public blockchain, a private blockchain or some kind of hybrid remains to be seen.”