The solution, Global Invoice Connect, was developed by global payments company TransferMate, a subsidiary of the international financial services Taxback Group, and Wells Fargo. Global Invoice Connect also took home the Product or Service award at the Deloitte Financial Services Innovation Awards, run in partnership with Financial Services Ireland and Banking & Payments Federation Ireland.
Established in 2010, TransferMate is the brainchild of Taxback Group founder Terry Clune. With the Group’s insight into the pain points of businesses making cross-border payments, it inspired Clune to find a solution that could overcome delays, reduce costs and deliver frictionless B2B global payments.
“From our experience of providing global tax recovery and global payroll solutions, we realised that there was a major challenge for companies making cross-border payments,” explains Clune. “We were experiencing significant delays ourselves as well as significant costs and administrative difficulties and we knew that many other businesses had the same challenges.”
A regulation highway
TransferMate set about developing partnerships with banks and regulators and obtaining licenses and regulatory approval across Europe, Australia, Canada, Hong Kong, New Zealand and the USA as the foundation for building a frictionless international payments solution.
“Developing the platform was a time-consuming process,” says Sinead Fitzmaurice, TransferMate’s CEO. “In New York alone, it took us four years, but we knew we could develop a solution that was simply beyond the capability of traditional banks hampered by archaic legacy systems. Regulation is key. We understood from the outset that our regulatory capability and B2B focus would be what differentiates us from other fintech businesses whose emphasis is more on consumer solutions. It has taken us a lot of time to build our 'regulation highway', the infrastructure that underpins our products, but the robust regulatory framework that we have created is what gives us our competitive advantage.”
“In terms of how it works, traditionally, banks could only offer payers the ability to make global payments through a wire transfer, which uses a network of other banks to transfer funds to the final destination and requires payers to know a significant amount of information about the beneficiary and the beneficiary’s bank. Payers often incur foreign exchange charges when converting currency to satisfy an invoice and the fees imposed by each bank in the payment chain reduces the principal amount of the transfer. In addition, any misstep in payment instructions can lead to delays and discrepancies in the amount received by the invoicing business which in turn places a burden on accounts staff who have to manually reconcile payments and resolve errors. So, we wanted to build a B2B platform that would eliminate the chain of banks, allowing for reduced cost and greater reconciliation.”
Reducing complexity, cutting costs
TransferMate’s award-winning product, Global Invoice Connect, launched in May 2019 in collaboration with Wells Fargo Bank, addresses three main issues for customers—reducing global payment complexity, lowering the cost of foreign currency exchange, and streamlining the accounts receivable process.
Bills are presented electronically in either US dollars or the local currency. TransferMate then collects funds locally before delivering the full invoiced amount (often on the same day) to the business’s Wells Fargo account via a domestic automated clearinghouse (ACH) payment. Global Invoice Connect also streamlines the receivables process and reduces administrative overhead by automatically matching payments to the invoiced amount, thereby eliminating manual reconciliation. For payers, it helps reduce payments cost in many locations as a local funds transfer is more cost-effective than wire transfers. Additionally, because of its buying power, TransferMate can provide competitive foreign exchange rate that is often better than what may be provided by the payer’s local bank.
New markets, new opportunities
“Cross-border business is no longer reserved for large multinational corporations,” says Clune. “Businesses of all sizes are connecting with suppliers, customers, vendors, and services around the world, and expect to send and receive money across borders with the same transparency and speed as their domestic payments. Traditional wire payment methods are not meeting these expectations and established financial institutions are looking for innovative solutions to meet their customer expectations and reduce cross-border payment friction.”
“TransferMate is leading the charge in addressing this challenge for banks and businesses. Our collaboration with Wells Fargo is the latest in a series of partnerships we have formed since 2010, extending our reach to 162 countries and 134 currencies.”
What drives innovation?
Listening to customers and fostering a culture where everyone is encouraged to contribute ideas is what drives innovation for TransferMate, says Fitzmaurice. “It’s always a good idea to put yourself in your customer’s shoes. Network, avail of industry and Government support and be ambitious. More businesses need to realise that you can go global from the island of Ireland.
“For a business like ours, that is leading change in the global payments fintech sector, it is vital to create a culture where innovation can thrive. This is one of the reasons why TransferMate participates in the Great Places to Work programme. We put a lot of emphasis on good communication, focus groups, networks, and encouraging our people to listen to customers, inspire each other and create meaningful change. Winning these Financial Services Innovation Awards is of huge importance to our entire team in this regard. The Deloitte brand is very prestigious and winning helps to raise TransferMate’s profile internationally. It highlights the strides we are taking to lead real change in the international payments market. The awards are also an excellent showcase for Ireland as a hub of innovation in the international financial services sector.”
David Dalton, head of Financial Services at Deloitte Ireland, commented: “Congratulations to TransferMate on their achievement. The company continues to grow and innovate and is an outstanding success story of an Irish company making an impact on both the Irish and international stage. We launched these awards to showcase the pioneering innovations that were being developed in the industry and to showcase Ireland as hub for innovation internationally - TransferMate certainly exemplifies that. The judging panel were particularly struck by their appetite to collaborate with strategic partners to drive innovation within their businesses. We wish them every success in the future."
Visit Deloitte.ie/fsia to read more about the Deloitte Financial Services Innovation Awards and all the 2019 winners.