The market for buying goods online from other parts of the globe has gotten so big that it dwarfs the world’s largest economy. An EY study found that global cross-border payment flows are expected to reach US$156 trillion in 2022. Meanwhile, the United States GDP in 2020 was smaller at US$20.93 trillion.
The same study pointed out that the dominance of banks in the market is being challenged by new specialised players, which offer “innovative” solutions to traditional pain points.
Two of these new players are fintech company EasyPay and B2B cross-border payments specialist Currencycloud. The former recently chose the latter’s platform for giving merchants the means to sell in other countries outside their own.
SMEhorizon recently interviewed Michael Chang, Director for International Payment at EasyPay, and Rohit Narang, Managing Director, APAC at CurrencyCloud about the partnership.
Addressing a pain point
Chang revealed that when EasyPay started in 2016, they saw a shift from Chinese online merchants selling on domestic platforms like Taobao to international platforms like Amazon and eBay.
“We serviced these merchants by providing them with foreign payment solutions to collect funds from these major platforms,” he added.
Chang noted that increasingly more sellers caught on in 2018, and the competition between them became “fierce”.
“In addition to opening stores on Amazon, sellers started their own websites and started selling under their (own) brands,” Chang observed. “This required them to open foreign bank accounts in their name. Larger sellers were able to travel abroad or pay a high fee to acquire these types of accounts, but most small and medium-sized merchants did not have this option.”
Because of this, EasyPay contacted several payment and banking partners to come up with a solution. Chang said Currencycloud was the first to address this issue by offering a platform that met the needs of the merchants they were targeting.
“Currencycloud’s named accounts product allowed our clients to open accounts without having to leave their country,” he said.
Why choose a specialised player?
But why work with a relative newcomer in fintech like Currencycloud instead of a long-established institution like a bank?
According to Chang, EasyPay worked with a bank before choosing Currencycloud. The banking experience, however, wasn’t what they were hoping for.
- The bank had no API. EasyPay’s customers had to manually open an account by filling out forms and waiting days for an account to be issued.
- When a client submits a payment request, EasyPay had to process it manually.
- When EasyPay’s accounting team balances their books at the end of each business day, they still had to download data from the bank’s platform then upload it to their system.
- “Poor” FX rates.
- EasyPay had no direct contact with the bank’s tech, compliance, or payment team. Everything had to go through the bank’s business manager.
Chang then contrasted how the Currencycloud experience has been like:
- Currencycloud has an API, which enables EasyPay’s know-your-customer team to open accounts and onboard clients on the same day.
- EasyPay’s clients are able to make payments themselves, reducing payment time and eliminating the need for EasyPay to assign this task to a person.
- EasyPay’s accounting team is able to balance the company books on the same day.
- EasyPay is able to link their transaction monitoring software to Currencycloud’s API, reducing workload on their compliance team.
- “Competitive” FX rates.
- Currencycloud provides direct communication with each team (e.g. payment, compliance, support).
Unique service proposition
While integrating the Currencycloud API, EasyPay used the Currencycloud Direct cross-border payments platform, which currently serves as the fintech’s backup option. EasyPay, said Chang, only uses the Currencycloud platform for ticket troubleshooting and reconciliation of transactions against their system.
“Currencycloud Direct is user-friendly and doesn’t take long for new staff to get the hang of it. With the API’s integration to our system, it reduces the workload, improves the efficiency of our teams, and offers the right products (that) our clients require,” he remarked.
Ultimately, EasyPay has three reasons for choosing Currencycloud over other international payment platforms:
- Named sub-accounts: “This is the most important reason,” said Chang. “Without this product, I think we would have chosen another payment partner, even if they had worse technology.”
- Instant account opening: “Another reason as banks usually take two to three days to get these sub-accounts opened,” he observed.
- Twenty-four-hour customer service: “This was the cherry on top. Communication is vital in this business. When our clients have questions regarding deposits and payments, we need quick responses from our payment partners,” Chang added.
Currencycloud’s Narang believes that Currencycloud is particularly suitable for EasyPay because their solutions are modular and customisable for any cross-border payment and FX requirements.
“Our RESTful APIs are customisable to meet business needs and easy to integrate with businesses’ workflows and systems. It also allows businesses to retain full control over the platform,” he continued.
When all is said and done, what’s next for EasyPay and Currencycloud?
“The fintech space is getting pretty crowded,” said Chang. “Most innovations we see in the past year are in the crypto and defi (decentralised finance) sector. We have been exploring this space and treading lightly, as most of our clients are from China and we need to adhere to Chinese rules and regulations, as crypto is illegal on the business level in China.”
EasyPay is also branching out into video games, recently setting up a gaming R&D division in Chengdu, China.
“The plan is to create a multiplayer mobile game that will complement the metaverse,” Chang explained. “The purpose of this program is to explore and provide a payment gateway/solution for metaverse and Web3.
Currencycloud, on the other hand, is all about continuous development.
“In 2022, we are focusing on enhancing our tech stack, and enabling instant processing and embedded payments on our platform, scalability and improving our network coverage,” said Narang.
“We are looking to eventually offer instant, embedded cross-border payments 24/7/365 for G10 corridors for each region we service – EMEA, APAC and North America. We also plan to speed up our APAC routes now that we are in the region and ready to serve businesses locally,” he concluded.