London-based B2B fintech company Currency Cloud recently released a trend report revealing the need for faster, less expensive and less complicated ways to make cross-border business payments. With $18 million in funding fueling its U.S. expansion, Currency Cloud says it’s taking on those cross-border pain points. In “The Power of Payments in Today’s Digital Economy,” Currency Cloud found that among 1,000 finance professionals in the U.S. and the U.K., the U.S. is significantly lagging behind in terms of electronic processing of international payments. While 70 percent of U.K. businesses report relying on this technology, nearly half (47 percent) of U.S. companies still depend on paper checks.
“The volume of cross-border payments is increasing dramatically by the growth in e-commerce and the growth of global commerce,” says Currency Cloud CEO Mike Laven. What’s more, infrastructure in the U.S. hasn’t grown at the same rate, leaving U.S. businesses as the least well-served. Part of the problem, however, is the misconception among U.S. companies that improving their internal systems will be too difficult or expensive to implement, according to the report. The smallest companies in the U.K. feel likewise (See graphic).
Compared with traditional cross-border payments, Currency Cloud’s platform offers a more efficient, less expensive and streamlined connection to the global banking system, through its API, the company says. This helps financial companies handle cross-border payments, while avoiding unnecessary foreign exchange losses and removing the time and expense involved with cutting checks or other processes that require manual work, according to Laven.
Making a cross-border payment through a bank typically requires three different departments: a customer service department, a forex department that can be in-house or outsourced, and the cash management or transaction services to actually complete the payment, Laven explains. “Our customers don’t see any of that complexity,” Laven tells Paybefore. “All they see is us. [Clients’] costs go down because we’ve taken out all of the complexity and their payments go through more efficiently than if they were to rely on more traditional means and infrastructure.”
Currency Cloud currently has approximately 125 customers using its platform and it processes more than $15 billion in payments every year. Its growing New York office has many prospects in the pipeline with more to come in 2016, Laven says.
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