SPEEDING UP THE PAYMENTS PROCESS
According to the World Bank’s latest
Remittance Report, $5.1 trillion dollars
are transferred daily across the globe.
The market today is shared among
the old financial institutions and
more than 350 paytech startups.
PaySend is not the largest, but the
UK-based money transferring service
is carving out a niche of its own and
has made the headlines several times
this summer: once for completing a
$20 million funding round, another
for reaching the 200,000 customers
milestone, and a third for winning
the 2018 PayTech Award for Best
PaySend CEO Ronnie Millar talks
about his company’s vision and the
future of money-transfer services.
For those who are not familiar with your product, what is PaySend?
PaySend is a payments disruptor that allows customers to transfer money for a $1 flat fee, directly from one bank card onto another using the 16-digit card number displayed on the front of the receiver’s bank card. We are sending money to card accounts in 60+ countries and we keep expanding our global footprint. This is our core product, to which we will be adding Global Account in Q3 of 2019.
What differentiates PaySend from the competition?
PaySend strategically partnered with Visa, MasterCard and UnionPay in order to complete transfers from card to card, rather than from bank account to bank account. This allows us to send money to 12 billion cards on this planet and do it in a matter of seconds, rather than days. Having usage of their established payment networks also allows us to forgo identification methods (IBAN, BIC, account numbers) used by banks, as well as the extensive onboarding, identification, and processing procedures seen in competitors.
The Global Account project, when launched, will be a digital wallet and ATM-compatible
bank card that allows customers and companies to purchase and switch between multiple currencies instantly, including cryptocurrencies. The decision to include cryptocurrencies falls in line with industry predictions that customers will soon demand to use and experience cryptocurrency in the same manner as they do dollars, euros and pounds.
What is the motivation behind PaySend’s products?
Our primary vision was to capitalise on customers that were underserved by banks, whilst building a loyal customer base by offering a safer, simpler and faster service. But what led us to pioneer a card-to-card solution was the decision to follow the thread of what customers wished to accomplish with their money transfers. What do they want? They want recipients to receive funds in hand more than they want it in their accounts, and cash, although an obvious answer, was not the right one. Society is moving too fast towards a cashless state. This is why we chose a card-to-card transfer option for our first product, and to make Global Account a cash-providing, but ultimately cashless, product.
How have customers taken to PaySend?
Trust barriers were felt by all independent money-transfer businesses in the beginning, and PaySend was no exception. This stemmed mainly from the industry having been historically dominated by a combination of the large banks and very large traditional cash-to-cash players. People were attached to sending money via a household name, and so how were startups going to acquire that level of trust? Leaps of faith, from zero to rapid adoption, required trans-generational trust, as well as success.
I think the record of paytech companies of varying sizes coupled with impressive VC backing opened channels of trust within the industry, but what really powered consumer trust was the fast development of paytech products engineered to give them better services across the board. From lending to sending money, we are truly focused on improving modern, nomadic lifestyles. In light of recent events. as well as our global network of 12 million users in 60 countries, I would say that, today, PaySend is received positively.
PaySend has also recently become on of the first residents of Astana International Financial Centre in Kazakhstan. What was the thinking behind this decision?
We are incredibly excited about the opportunity. Joining Astana International Financial Centre will give PaySend access to its Fintech Regulatory Sandbox, which allows FinTech innovators to conduct live experiments in a controlled environment under the regulator’s supervision.
Kazakshtan is also an excellent platform for growth into Asia. Though isolated from Europe, it is a fast-developing country with excellent resources and faster internet speed than countries like Australia. Great things will originate from there very soon.
How does PaySend intend to overcome difficulties involved in long-distance product development?
By keeping in mind that despite building a global business, we work within local markets. This means having local people on site who can advise and run operations. The concept of dictating a culturally insensitive central message from London or New York headquarters will simply not work. This is a warning.
Have you noticed a difference in perception between banks and paytech startups, such as PaySend?
Certainly. There are elements of fintech that are directly competitive, but with that we have also been seeing a development of complementary services between startups and local banking communities, particularly surrounding customers and companies, which banks have habitually overlooked.
Fintech alternatives gave smaller businesses a physical chance at banking, and in return have been rewarded by an influx of business and trust, when these entities started bringing in fresh waves of business, such as current accounts and transfer opportunities. Ironically, the very same commodities that banks were working towards. The surprise element of there being value in these small businesses has worn off, and banks are ready to collaborate with us to better serve new clients and emerging markets.
Where will the next disruptions occur in the money-transfer industry?
People, like markets, are segmented, and disruptions are welcome additions when they offer customers the luxury of seamless travel, business and lifestyle. Our smart card, which allows users to switch from currency to currency via an app, does just that, so we are hopeful that its popularity will increase.
I believe we will see several areas of disruption: innovation within supporting companies that will carve out the channels for larger players. Any improvement campaigns for the software development will create waves, particularly with initial soft beta testing, soft launching etc.
There is also a number of ways that supporting companies can help service providers with core service improvements, such as procedures for onboarding customers, handling compliance issues and legal hiccups. Those brave enough to pioneer here will be snapped up.
Also, companies that harness the trust of their customers to successfully expand services, from transfers to loaning and onwards. They have the potential to carve new channels, and the sum of them will actively mould the paytech landscape of tomorrow.
Consequential results in direct relation to these same companies demonstrating to industry players – old and new – that the generation of one-trick-pony companies is coming to a close.
A break from the mantra: ‘You’ve got to be big to succeed’. The exit of this old-school mentality has been a long time coming because, as we’ve seen in banking, ‘big’ does not mean ‘success’. In fact, ‘big’ can guarantee a higher number of mistakes and, at some point, a spectacular fail.
Finally, companies that allow crypto to be folded into everyday experiences will attract big reactions from investors and customers alike. We don’t yet know which cryptocurrencies will be successful, but offering opportunities for people and society to advance their experience of them will win.