Earlier this year, UK-based international remittance FinTech company Currency Cloud raised $18 million in Series C to expand to the US. We have been following the company's success and had the pleasure interviewing Mike Laven, CEO of Currency Cloud, about the company and the services Currency Cloud provides as well as insights on the challenges with international remittances and new technologies to make a change. Here’s an exclusive transcription of the interview with Mike:
LTP: Please tell us about the Currency Cloud Payment Engine. What is it and how does it work?
Mike Laven: There has been a fundamental shift in the way that consumers and businesses make and receive payments today with a major emphasis on speed and transparency. Business payments in particular require increasingly “open” infrastructures that can integrate with internal systems such as accounting and procurement platforms. Our Payment Engine is a cloud-based technology platform allowing companies to fully outsource their international payments. It is linked to the global banking network, and fully automates all of the processes around international payments for businesses, providing transparency around delivery of payment and cost. By plugging into our API, businesses can escape the heavy lifting of setting up their payments infrastructure in order to focus on their core business. Companies using our API include banks, payment service providers, large e-commerce businesses, FX brokers, remittance firms, card processors, prepaid card companies and business payment firms.
LTP: What are the challenges related to international payments that your solution is addressing? How are those challenges addressed in the market and how is Currency Cloud different?
ML: Global payments are complex and have opaque pricing models, yet they’re involved in daily operations of most businesses. Moreover, international payment transactions can come from a variety of systems such as payroll, payables, receivables and treasury, each with its own workflow and data requirement. Currency Cloud addresses these challenges by providing a simple API integration so that transactions flow seamlessly into the world banking system.
Today, international payments are almost fully provided by banks with manual batch processes, non-transparent prices and high rates. Currency Cloud uses automated processing to remove manual workflow and reduce error, allowing businesses to be more efficient than ever before and integrate directly with their existing payment infrastructure.
LTP: How do you reduce the cost for financial service companies so they can offer lower fees to end-customers?
ML: Our Payment Engine offers fully automated payments and all foreign exchange pricing at real-time wholesale market rates without markup. This allows our clients to reduce their processing costs. What is interesting to many of our clients, however, is that they can share these benefits with their customers, providing competitive rates while at the same time monetizing the value of the transactions themselves.
For example, one of our e-commerce clients with an international presence used to pay all their invoices in Euros, irrespective of where the end-supplier is based. This is a common practice in many industries. They now offer the facility to pay in local currency but at a small discount of the value of the invoice. Their suppliers can choose how to get paid, and most opt for local currency payments.
More significantly, our value to the many financial services companies that rely on our API is not simply the cost savings we deliver but more so the efficiencies and transparency achieved through our technology. Our clients are leveraging the Currency Cloud Payment Engine for more strategic means: to make international payments faster and more transparently, enabling them to focus on their core offering.
LTP: Security of money transfers is a major concern for businesses. How does Currency Cloud address the issue?
ML: Security is always top of our minds. In a heavily regulated industry where relationships are built on trust, we consistently adhere to the highest level of security measures and financial regulations specific to each region and territory we operate in around the world. Not only are we regulated in three countries where we meet strict requirements, we are ISO 27001-compliant and constantly look for new ways to enhance our security. As we were already following strict security measures, we opted to undertake the heavy auditing required to gain ISO 27001 compliance and receive our official stamp of approval.
LTP: What are the key trends in the transfer technology space? (Ex: Blockchain, mobile channels, etc.)
ML: Globalization is not a new topic in the business world, but in a digital world, this trend is accelerating rapidly. A number of key trends are converging to drive a significant change in the payment landscape. First, international trade is increasingly open to small businesses that do not have sophisticated treasury departments. At the same time, the nature of demand is changing. Big data combined with machine-to-machine transactions have enabled companies to develop sophisticated systems that require a fully automated built-in payment.
We are also seeing a proliferation of new financing and payment models which are being driven by the FinTech revolution. A one-size-fits-all approach is not appropriate for companies in today’s business landscape. Companies do not want to architect their systems and processes to fit their payment provider, so our APIs are built in such a way that companies can adapt our product to fit their business needs.
LTP: What are the milestones you have for Currency Cloud as a company? What are the next steps for the company?
ML: In the past year alone, we’ve closed an $18-million Series C funding round in order to further establish our presence in the US and around the world. Additionally, we launched our next-generation Payment Engine to make international payments even more efficient. This upgraded platform enables faster payment speeds and increased volume capabilities as well as providing customers greater flexibility to customize and manage payment flows.
As the FinTech sector continues to evolve, we’ll stand true to our mission of powering next-generation companies with a transparent, fast and trusted global payments engine. Since our business development and technical evolution is dictated by the needs of our clients, we’re constantly building features in response to the capabilities they seek. This allows us to respond in real-time to the changing economy and consistently improve and evolve our ecosystem.
At Currency Cloud, we’re restless. We’ll never stop developing and improving our offering in order to remain nimble and supportive when it comes to the needs of businesses around the world.
LTP: In a way, you are providing infrastructure to companies like TransferWise. This must be cost-effective when you are small but when (say) TransferWise becomes big, would they find themselves at a point where they will need to build their own vertically integrated offering?
ML: Consumer-facing personal remittance companies like Azimo, TransferWise, WorldRemit, and newer entrants like Revolut come from the same philosophy as Currency Cloud—that international payments should be simple, transparent and easy. These companies and others have made great progress in reducing the costs and delivery of international payments for their customers. The volume of international personal and business payments is huge and we are only at the beginning of building great companies that can reduce costs and ease friction across the world. Currency Cloud is proud to be a supplier, a partner, and sometimes, a customer to a full range of FinTech firms that are transforming the financial landscape.
LTP: Currency Cloud recently launched Payment Engine Two. Could you please tell us more about it? What does this solution allow your clients to do that they could not do before?
ML: Payment Engine Two is an upgrade to our current platform in response to the changing payments landscape. With today’s on-demand economy and global nature of business, there is a push towards smaller transaction sizes at higher volume, with payments increasingly embedded and hidden within other services. To address this issue, Currency Cloud’s Payment Engine Two allows businesses to deeply embed the payment in their workflows using a versatile set of APIs. It provides dramatic increases in scalability, functionality, usability and transparency. It helps developers to further integrate their internal systems quickly and efficiently with the world banking system.
LTP: Currency Cloud attended the recently concluded Money20/20 in Las Vegas. What did you share with the audience?
ML: For the first time this year, Money 20/20 broke out sessions on business payments from consumer remittances. We participated in an excellent panel discussion with Western Union, Payoneer, Cambridge Global Payments and GeoSwift of China on coping with the massive growth of international business payment flows, dealing with worldwide regulation and the growing complexity of new business models of the on-demand economy. At the conference, we introduced Payment Engine Two to a whole range of financial technology businesses from payments to lending, to mobile and e-commerce.