The United States is the world’s biggest market for international payments, yet is a few years behind other regions in the technology used to quickly accept and transmit payments. That is a market opportunity Currencycloud is happy to address, co-founder and North American general manager Richard Arundel said.
Mr. Arundel admitted Currencycloud benefited from good timing, as they entered the space just as companies were paying more attention to all aspects of business transactions. Until recently those companies accepted the few options available to them, complete with their delays and fees, as a fait accompli .
That began to change earlier this decade as fin-techs started re-envisioning every aspect of financial transactions.
“To me it was fascinating to see what they were doing how they were piloting and attacking that,” Mr. Arundel said.
Given his past experience in foreign exchange including as a founding member of the FX Capital Group, Mr. Arundel said he found it interesting to witness how consumer demand had evolved to demand more immediate payment solutions. That has caused the market to rapidly change over the past five years.
As the largest region for international payments, the United States is a ket figure in the global economy, Mr. Arundel said. Yet the country is a few years behind other parts of the world such as the European Union in their embrace of fin-tech opportunities.
“Three years ago the people in our office new we needed to get in North America,” Mr. Arundel said. “There was a market opportunity.
“But you don’t simply pick up model and move it, for it’s a different world. North America is a few years behind many more players and because of that it’s a few years behind in terms of the evolution of the technology.”
A key aspect of a successful business plan must be education, Mr. Arundel explained. While much of the talk across sectors was one of disruption, the actual situation for international payments is more nuanced, as new solutions don’t change how money moves but how people access the rails. Explain how the new system works and explain the cost and time savings.
Expect change to continue coming from across the pond. The combined effects of the European Union’s Markets in Financial Instruments Directive (MiFID) parts I and II, along with the General Data Protection Regulation (GDPR) will cause regulators to force financial institutions to allow greater access to client data (MiFID) while simultaneously assuring both regulators and customers they are taking clear steps to protect it (GDPR).
“It’s a global economy – how people pay staff around the globe, customer payments, and others,” Mr. Arundel said.
North American companies should closely watch how their European peers adjust to those movements, learn, and adapt those lessons for their market. For one, Mr. Arundel said he could see more open banking coming here. That will force financial institutions to rethink their approach to data management and protection.
“It’s not a white flag for giving in,” Mr. Arundel said. “It’s good for business.”
It’s also good business to prepare for growth, which comes with all sorts of unexpected tasks, he added. With payments, one topic few anticipate is reporting and reconciliation, which is actually more of a challenge than processing. Should payments fail or experience friction a company cannot maximize that growth, so Currenclycloud works with their customers to plan for their growth by preparing for the issues they’ve helped earlier clients face.
Ultimately Currencycloud is in the compliance industry and that is a massive opportunity, Mr. Arundel said. Many of their clients are not regulated and do not wish to be, so it is Currencycloud’s responsibility to develop a payment engine and APIs that exceed the requirements of state and federal regulators, which in the case of the United States involves working with 50 state regulators and additional federal agencies one at a time.
But each client has unique needs, so one canned solution doesn’t work either, Mr. Arundel said.
“What Currencycloud is doing is talking about our APIs being building blocks. Our domestic API is one. If you want to provide payments to companies, we have a building block for that.
“We ask our customers why they want to get involved in the heavy lifting when we have an obligation to the industry to provide a sound compliance solution.”