“The world is getting smaller. People are traveling the world, and they are selling and purchasing property, getting educated, purchasing healthcare, spending and shopping. The question is how to make those purchases possible — and better — for global citizens, whether they’re halfway across the world or looking to transact in person in a foreign land.”
That’s Flywire CEO, Mike Massaro, on what he describes as the “state of the international state” — and the opportunity that Flywire set it sights on when it created its cross-border receivables network. Flywire streamlines payments for those global citizens and, just as importantly, the receipt and reconciliation of those payments for the businesses to whom they are sending money.
But not just for any global citizen and not just for any payment — but those low volume, big ticket payments for which moving money cross border is often opaque, expensive, slow and friction-filled for both the sender and receiver.
But Massaro says that Flywire has only begun to scratch the surface of the big opportunities that present themselves as the world gets smaller and global citizens make it a priority to experience it outside their own home country.
“We wanted additional coverage, additional depth — and the best partner we could find at our growing volume to turbocharge our growth,” Massaro noted. “We also wanted to expand the payment opportunities for these global citizens — and to do that at scale.”
Speaking of scale, for First Data — the merchant services provider that processes $2.2 trillion a year for approximately six million businesses and 4,000 financial institutions in more than 100 countries — operating at scale is not a problem.
But, noted Frank Bisignano, chairman and CEO of First Data, one of the things that First Data doesn’t do at scale today is enable large sum international payments to move as fast and as transparently as possible.
“[Flywire] has a very very good business model,” Bisignano said, “and they do things we don’t necessarily do at all. Any time you can partner and bring some value across the board, it is a good thing.”
And so, partner they have.
On Tuesday, May 2, the firms jointly announced a deal “aimed at streamlining cross-border transactions for their respective client bases.” In practical terms, that means the two firms are launching a reciprocal referral relationship for users of Flywire’s international payments and receivables platform and First Data’s client network and technology offerings.
For Flywire, they can now offer the clients of their customers — the hospitals, the universities, the real estate brokers, the import/exporters — the opportunity to offer expanded card payment options. For First Data, the opportunity is to leverage their client base to drive more business in large-scale international payments, with greater presence in healthcare, education and B2B verticals.
But the benefits — according to Massaro and Bisignano — are bigger than what appears on paper on day one; they are also about what the two firms can do working together going forward. Because, Massaro noted, most partnership offers are based around the concept of “what can you do for me” instead of the right question, “what can we do together?”
Here’s how First Data and Flywire are asking and answering that question.
A Partnership Beyond the Press Release
“A lot of these things that get called ‘partnerships,’ Massaro noted, “are what I call ‘Barney partnerships’ — ‘I love you, you love me,’ but there isn’t a lot more to it than that.”
Bisignano said that First Data looks at partnerships as two-way streets, where the focus is on bringing volume to each other’s respective businesses in a way that complements the capabilities and strengths of each. It’s what he says will make the First Data/Flywire partnership something that’s grounded in delivering client satisfaction and expanding the capabilities they need to satisfy the needs of the global citizen.
“This is a partnership built on a mutual commitment to client satisfaction,” Bisignano said, “and delivery. This combination can add tremendous value to our respective client bases.”
Massaro noted that just giving access to the expanded universe of card payments is the beginning of the opportunity its client base will be seeing — but not the end of it.
“If you think about what it’s like to just run a business, the number of relationships that any business needs to support payments is high,” Massaro explained, “and when those relationships cross borders, the number and complexity of those relationships becomes even greater.”
A business with a presence in 2-3 countries means 2-3 different banking relationships, he explained. If they conduct business online, that’s another one, and probably another POS vendor on top of that. Massaro said that the benefit of a Flywire/First Data relationship is in giving the enterprise one relationship that can deliver invoicing, eCommerce and international card processing.
Businesses want to be in the business they went into — both Massaro and Bisignano noted — but they just don’t want to be in the business of managing complicated relationships with payments and billing vendors, which is something they are often pushed into because of price. Since the First Data/Flywire partnership will think about relationships holistically, those relationships will be streamlined, and the economics of the relationship will reflect that.
“This relationship is not just about doing new things,” Bisignano noted, “but about finding ways to do them better.”