A scalable banking proxy

A scalable banking proxy for fast growing businesses around the world

Ambitious businesses focussed on expansion on a global scale are continuously let down by the inefficiencies of international payments.  Proxy platforms like paypal and stripe that serve as a mix of wallets and payment processors aren’t all that better as they charge a hefty FX fees from all the parties involved in a transaction.  Any convenience provided by them in the form of international collection of funds is offset by the large cost associated with every such transaction. 

If we dig a little deeper it becomes clear that the inefficiencies in the banking services has creeped up the chain and has lead to the inefficiencies in third party payment processing, payment disbursements and even in the operations of businesses around the globe. 

Today we find ourselves dealing with the unfortunate scenario where the international businesses have all but given up hope on any kind of improvement in the global banking services, so much so that they take the exorbitant “currency exchange” fees in their stride and cast aside the losses as “cost of doing business”.  And while some of the big industries can survive these losses it’s the little guys that suffer the most. 

The startups that never take off because they are unable to find half decent international banking services. The great ideas that are stifled because they are discouraged by  passiveness of financial institutions can’t scale with them. These new businesses find it hard to work in an international market so they are left with no choice but settle for less and compete hyper locally amongst themselves  only in the hopes of claiming a better support from their banks and their payment processors.  

This is not right. Banks are the backbones of economy and the current crop of international banking services are hampering the global economic growth. We must find a better way to do things. We live in an interconnected and international world. The banking services must evolve to meet the needs of a modern business environment. 

Our goal

Our goal is to create next generation of banking products that can help the businesses scale without worrying whether their banks and payment processors can scale with them. We are tackling the problem of exorbitant international payment fees. 

Our solution

We’re proposing a multi currency account where a corporation may accept payment in a currency of their choice. Regardless of the payment processor they may use they’ll always be able to save on currency exchange.  Our solution will:-

  1. Allow large and small international corporations an ability to hold money in multiple currencies.
  2. Give them a system that enables them to internally convert the money so acquired to a denomination of their choice before transferring it to a parent account. Or distribute the money directly to their clients, as it is, without having to convert it in an intermediary denomination. 
  3. Wallet like facilities by the means of client pools and virtual accounts that enables them to demarcate the payments and minimize the hops that money has to make before reaching it’s destination. 

The Implementation

We’ll be implementing our solution in the form two distinct services. An on demand checking account that can be used “as a service” to move money. And a personal multicurrency checking account for the customers who want greater control over their client monies.  

For sending payouts using our “hosted” multicurrency account the client would be onboarded using a simple KYC check. This will require them to send the details of their business and specify for what purposes they want to use our facility. The onboarding would be completely hassle free, quick and electronic. 

The opening of client pooled account with us would require them to satisfy more involved KYC checks. However once these obligations are fulfilled the benefits offered by a monies management account would be far greater than ones offered by our “hosted” multicurrency account service.  

Benefits

– Our solution will be “pluggable” in any payment gateway. If the user prefers to collect their payment with lets say paypal they can still use our multicurrency monies management account to first minimize the currency conversion charges and then to send payouts. 

-The technology that we build, upon the infrastructure provided by the bank, will allow us to serve other financial institutions like small retail banks and empower them to survive in an international market. 

–  By building a system that is “backwards compatible” and pluggable with the  existing payment processors of the world we’ll completely change the way people view international banking.

Potential Markets

– Other Challenger  and small retail banks(!) : – One of the major challenges faced by  challenger banks is that they lack the operational capacity to expand to an international market. While they face stiff competition from the traditional banks we could offer them an olive branch and provide tools that enable them to build services that can operate internationally. We believe that cooperating with challenger banks and helping them would be beneficial in the long run as it will help us to improve our core offerings as well. It’s a win win. 

 – Payment processors:- Though the payment processors often get criticised for offering poor FX rates  the truth is that they are limited by their own partner bank and the banks of the recipients. Our platform will allow them to “plug in” a very efficient banking backend to help them deal with  the inefficiencies of international payments. In other words simply by having an account with us and using our services to move the funds without changing anything else they’ll be able to save on FX losses.  

Businesses that operate internationally – One of the major goals of our product is to attract fast  growing startups that work on a global level. Airbnb is a classic example. They work internationally. Send payouts to homeowners around the world and suffer a great deal of losses in currency conversion. Now if they could have an efficient banking proxy with which they could temporarily collect money in any currency and send payouts to their clients it would solve their problems. 

The system that works for airbnb will also work for airlines, hotels, videogames and tourism industries. The problem that we’re solving is essentially the same for any business working on a global level.  

Category

Posted

  • On January 26, 2020