Xendpay is a payments company that has generally focused on consumer money transfers. But in an announcement Friday (Nov. 4), the FinTech firm revealed a new service geared towards SME payers.
U.K.-based Xendpay is rolling out Xendpay Business, an online money transfer service for small businesses that need to make international payments. The company’s business model for the tool is unique: Xendpay Business offers a “pay-what-you-want” fee model, enabling small business payers to choose how much of a fee they pay when using the service.
In its announcement, the company pointed to the challenge U.K. SMEs face when engaging with international traders due to a lack of transparency in the fees they pay for foreign exchange services.
“We are the first company to have scrapped compulsory fees in response to the industrywide lack of transparency and endemic rip-off prices,” said Xendpay CEO and Cofounder Paresh Davdra in a statement. “I knew we could do better while still remaining viable.”
The firm added that a pay-what-you-want fee model will encourage brand loyalty, enabling small business payers to access affordable cross-border payment services while Xendpay can still make money. The business model has been endorsed by Wikipedia Founder Jimmy Wales, the company pointed out.
Xendpay first introduced this fee model a year ago, and according to the firm, it has seen its transaction volume increase 12-fold, leading to $3.2 million in fees saved for its customers.
“As Xendpay has shown, money transfers fueled by voluntary contributions are no longer a pipe dream,” Davdra continued. “By using and sharing the Xendpay experience, customers join in taking real action for a better global economy, ensuring more money reaches its intended destination.”
Xendpay’s introduction of a pay-what-you-want fee model for international payments made by small businesses follows research earlier this year that found U.K. SMEs pay thousands of dollars in often hidden and unexpected fees for their foreign exchange services from banks. Covercy analysis released last August found that 69 percent of SME exporters pay “completely unnecessary” cross-border payment fees.