Cross-border trade is far from simple, and for many SMEs, that complexity is crippling. Research from HSBC released late last year found that among all of the challenges small businesses face when looking to work with suppliers across borders, an overall lack of global business knowledge and experience is what’s truly holding these entrepreneurs back from a global stage.
Marwan Forzley, CEO of cross-border SME B2B payments firm Align Commerce, said that figuring out how to make international payments should be small businesses’ first step to going global.
But as SMEs look to expand internationally, so does Align Commerce — which, by the way, has changed its name to Veem.
“The word ‘align’ was really about the layer of functionality aligning between different [payment] rails, and as the company progresses and as we scale, we feel like the name Veem best reflects where we are in the market,” Forzley recently told PYMNTS. “Veem portrays the function of our business, which is moving money from one part of the world to another part for SMBs.”
A rebranding isn’t the only shift for Veem. Today (Mar. 8), Veem also revealed that it raised $24 million in new funding. The Series B round was led by National Australia Bank Ventures, while GV (formerly known as Google Ventures) and SBI Investment Co. also participated along with existing backers. The funds, Veem said, will be used to expand geographically and enable more SMEs to transact across more markets in more currencies.
But most importantly, Forzley said, the investment will be put toward helping small businesses take that first step to international trade by sorting out and streamlining the issue of cross-border payments. It’s a space, the CEO said, that has traditionally been dominated by wires.
“When you’re moving money on bank wire, it’s such a bad experience,” he said, adding that that negative process applies both for the buyer and supplier.
SME payers have to pay the fees associated with wires, and there is limited visibility into where the money is and when it lands with the supplier. Suppliers, meanwhile, have to simply wait to see those funds and are similarly hit with fees. According to Veem, while small businesses account for an estimated $6 trillion in cross-border payments, they pay $50 billion in fees thanks to this bank wire process.
But with so many payment rails that can enable a global transaction today, it can be difficult for a small business owner to know where to start. Forzley explained that one of Veem’s priorities is to tackle this issue for the small business owner.
“We don’t believe there is one technology that’s going to work across the world,” he said. “It’s a big world, with so many corridors and so many markets.”
With access to multiple payment rails including blockchain and Veem’s own bank accounts across multiple markets, Forzley said it’s most efficient to tackle a global transaction based on the customer’s needs.
“In some situations, our own bank accounts work best, and in other situations the blockchain is a really good instrument to move money,” the CEO stated. “In others, working with a local payment provider is best, as they are connected to businesses on the ground in that country.”
Forzley said that in many ways, SME clients depend on Veem for guidance regarding how best to approach making payments in a new market. In today’s interconnected world, a small business can no longer afford to ignore the global stage.
“Even when you start a new business, it’s very likely that your first customer isn’t going to be from the U.S. or your first supplier isn’t going to be from the U.S.,” he said. “The biggest thing you need to understand when you’re dealing with global markets is that markets have their nuances, they have their issues. And you need to be able to deal with them.”
A critical way of doing so is to figure out how to make cross-border payments in an affordable, seamless and painless way, he added. And having a financial services partner to handle payment rail, compliance, tax issues, FX and other complex issues surrounding cross-border payments is a necessity.
“That’s one of the key building blocks,” continued Forzley. Otherwise, any attempt at going global will be in vain.
With fresh funding and a new name, Veem can enter into new markets, too. The firm currently operates in 60 countries, said Forzley, and will continue to scale its solution as SMEs themselves scale globally.