For Flywire, the decade that’s about to wrap up in three months has been about much more than just a name change.
Look back to 2009, when peerTransfer was just an idea at the Massachusetts Institute of Technology. Now it’s a company processing $6 billion per year in volume across 2,000 clients and solving real-world problems across a variety of use cases.
Call it a microcosm of payments change, as seen through the lens of a single company.
According to Mike Massaro, CEO of Flywire, in the latest “Class of 2009: Innovator’s Club” Masterclass, a decade ago, the overarching mindset of payments innovators may have been that they didn’t have to – and would not have to – broaden their product offerings.
In looking toward cross-border payments, companies might simply mull the fact that people need to pay bills overseas, and then step in to facilitate those payments. But those same solution providers would not look too deeply at what was needed to support both sides of the payments equation.
In other words: Pain points existed not just for senders, but for receivers, too.
“Most remittance and money transfer companies have historically focused on the sender,” said Massaro in an interview with Karen Webster. “So if I’m in the United States and sending money to Mexico, I will use a money transfer service. With high-ticket items, people are more likely to use their banks” – and that’s especially true when it comes to paying for higher education.
Consider the fact that universities such as Harvard, MIT or NYU commonly have students hailing from more than 100 countries or territories.
“For us to go to 100 countries and territories and tell the payors ‘this is the best way to pay’ – well, that is something that would have required ridiculous amounts of capital,” he said.
Massaro noted that Flywire began to see the problem it was solving differently as it interacted more widely and more often with the billers and the recipients of fund flows across borders, such as universities. “We realized this is how people trust the way to pay,” he told Webster, stating that individuals trust the “brand name” of the universities and the payment options they present. Flywire realized that focusing on the receiver side of the payment would eventually “pull” the senders to trust and transact.
To get the payors’ trust, Massaro said, it was more important to have acceptance in a given country through preferred payment methods than to have growing brand recognition for Flywire.
“They looked at the top of the invoice or the mobile screen they were using, and saw Harvard,” he said. “The payments were powered by Flywire, but the logo in the middle of the screen mattered more as they saw Alipay or WeChat, their local currencies, or Visa and Mastercard.”
A second pivotal shift for Flywire came with the suppliers, Massaro said, noting the importance of helping them deflect “inbound engagement” from students or parents when it comes time to pay tuition. The universities, after all, do not have unlimited hiring budgets, and typically do not have people inside the finance departments that could, for example, speak Mandarin.
Smoothing the reconciliation part of the equation has also been a boon, he noted. Many solutions providers may overlook those needs, because they may not be as exciting or revolutionary as text-to-pay or faster payments offerings – and yet reconciliation remains critical for recipients.
“These are among life’s most important payments – and moments – and we’re not dealing with small dollar amounts,” Massaro pointed out. “This is you sending your kid abroad.”
The mindset of facilitating payments across life’s most important moments extends to other verticals, including healthcare and luxury travel, said Massaro. Flywire became aware that hospitals were encountering the same payments friction that was evident across universities – namely, that a significant number of patients hailed from other countries and sought out U.S. facilities for various best-in-class treatments. In addition, many hospitals maintain academic affiliations, he noted, which dovetailed with Flywire’s original targeted vertical.
Beyond education and healthcare, said Massaro, “the luxury travel sector started to emerge for us because of the high-ticket payments – and often complex payments – that were involved. As travel becomes more about ‘experiences’ than about just going and sitting on the beach, there is a huge logistical problem centered around the movement of money across multiple receivers.”
Call it the triple crown of “life’s moments” – and, as Massaro pointed out, those three verticals are where the company will focus its efforts for now. That comes against a backdrop where, in the payments industry in general, he said, evolution means the acceptance hurdles to mobile and cross-border payments keep coming down, as do costs.
As for Flywire’s guiding principles into the next decade: “We’ve realized it is less about us than it is about providing the marketplace with all the ways you want to pay,” Massaro told Webster, adding that “you have to let the payor figure out what makes sense for them.”