VertoFX streamlines X-Border payments for SMEs
Trade has become more global than ever, but paying overseas suppliers remains a challenge for companies looking to make payments in less familiar currencies belonging to emerging economies in Africa, Asia and the Middle East. , for example.
This logistical challenge is what London-based VertoFX has been trying to solve since 2019 through its B2B Foreign Exchange Marketplace, which aims to help small and medium-sized enterprises (SMEs) in emerging markets, and in Africa in particular, carry out transactions. payments across multiple currencies, while minimizing exchange rate (FX) volatility.
Last year, the B2B cross-border payments provider developed a multi-currency wallet product, which allows SME customers to convert money from one currency to any of Verto’s 30 and more other currencies on its platform. form and keep the new currency in their wallet until they are ready to make a payment.
Read more: From currency convertibility to cross-border payments in emerging markets
This means that a customer in the UK who needs to make a future payment to three other companies in South Africa, Kenya and the US can easily convert their pounds sterling into each of the three local currencies and keep the funds in one. virtual wallet until ready. to issue the payment.
“This way I eliminate the exchange rate risk because I am able to now know what the rate should be converted to. [South African] rand, Kenyan shillings and US dollars, ”VertoFX co-founder and CEO Ola Oyetayo told PYMNTS in an interview, adding that being able to remove price and rate uncertainty is why this feature is so great. popular with its SME customers.
But Oyetayo said merchants are also keen to collect payments from businesses in other countries, a need Verto is addressing with a new multi-currency solution delivered in partnership with Luxembourg-based financial infrastructure provider Banking Circle.
See more : Verto, partner of Banking Circle on international payments
The deal, announced earlier this month, will allow the B2B cross-border payment provider to streamline international payments for customers using the Banking Circle Virtual International Bank Account Numbers (IBAN) solution. This will allow Verto to issue specific IBANs for accounts and payments on behalf of their customers, simplifying reconciliation and increasing customer confidence in the process.
For merchants, these global bank accounts will allow them to make and accept cross-border payments in multiple currencies in a way that would be difficult to do with traditional banking systems.
Leveraging access to Banking Circle’s local payment rails will also allow Verto to bypass the expensive and slow traditional banking network to make payments without the need for a physical presence.
“This allows us to issue multi-currency accounts to our business customers, which means … I can basically say that I sold these products to you in dollars, you can make payment to my dollar account hosted by Verto,” Oyetayo explained. , adding that these multi-currency capabilities have brought the company’s portfolio product to life, used by around 45% of companies in the B2B marketplace.
See also: The B2B market fix for FX in emerging markets
An ideal Verto world
Oyetayo said that in an ideal world, the company would like to create a closed ecosystem where wallet-to-wallet transfers can take place between companies using the Verto platform.
This means that a UK company wishing to pay a supplier in Kenya, for example, could transfer funds from its Kenyan shillings wallet directly to the supplier’s Kenyan shillings wallet, thereby eliminating the multitude of middlemen involved in the network. bank correspondents, he explained.
“Our worldview is that at some point we’ll have a world where every business will be on Verto for specific lanes, and they’ll use our wallets to send and receive money. [instantly],” he said.
But in the meantime, the B2B payments company has started beta testing its application programming interface (API) to give businesses and FinTechs in corridors such as Africa – “one of the most dear to send money to the world “- access to the infrastructure and banking relationships that Verto has established over time, he said.
“What we want to do is allow tech-savvy companies to integrate with us through an API, and then we [can] fuel their cross-border payment needs, ”Oyetayo said, adding that Verto’s regulatory license from the UK’s Financial Conduct Authority (FCA) will facilitate this process.
To keep up with the times, the London-based company has launched an app to enable cross-border payments via mobile and is preparing to launch a card product next year that businesses can link to their wallets to make payments. in line.
Part of the $ 10 million the company raised in September was also spent recruiting “world-class talent”, such as COO Tim Rudman, who previously worked for the UK transfer firm. WorldFirst money and payments and came to Verto with extensive experience. in the emerging market payments space.
Read more: B2B payment platform Verto raises $ 10 million
Regarding remittances, Oyetayo said Verto is working on a liquidity proposition for smaller players who often cannot pay instantly due to a lack of float in the currency in which they deliver.
“You could almost call it a buy now, pay for the product later.” [through which] Verto provides liquidity in [various] currencies to these small remittance players, allowing them to compete with larger companies that may have a line of credit with a local bank, ”he said.