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Transfermate agrees investment of $35million from Allied Irish in an apparent link deal that see support for cross border payment firms and traditional financial institutions
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Challenges exist for banks keen to embrace alternative technology and innovate in the traditional banking sector
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International B2B transfer payments partnerships and investment are likely to rise as the traditional banking sector attempts to innovate
Allied Irish takes a minority stake in Transfermate, the international payments firm, to develop future innovations for its customers. The partnership will see Allied Irish business customers being able to transact through Transfermate. The firm are keen to develop more agile technology, in a bid to remain competitive from a cost perspective and as customers demand service improvements. This will help Allied Irish to grow its overall digital banking capabilities as it aims to find solutions to offering faster payments at a lower cost.
Transfermate, the low cost B2B international transfer payments firm, enables quick payments cross border between businesses. Business customers can sign up to a pre-agreed currency exchange rate, which they can use to carry out their currency exchange at, helping to negotiate extremely volatile currency conditions and facilitating international supplier payments. Sending money abroad through Transfermate’s online platform can be completed in 1-2 days, depending on the currency pairs and countries involved. Businesses can also accept payments from customers in their own currencies in over 200 countries. Transfermate currently has offices in USA, Canada, Australia and Europe and will use this investment from Allied Irish Bank to expand teams abroad and in Ireland.
Fintech needs to be embraced by the traditional sector
The investment from Allied Irish into Transfermate represents an emerging trends for 2018, where we expect more links between banks and international money transfer providers as investment into fintech continues apace. These partnerships represent big benefits to the banking system as a whole as well as its customers. Banks have traditionally built proprietary in-house systems, usually with their own developed software, that does not interface easily with another bank’s proprietary software. This has led to challenges in adopting alternative technology, or for innovating within the interbank international payments structure. The challenges for integrating unwieldy and less agile older technology has held back the traditional banking network from being able to move forward and adopt the digital payments innovations. The advent of many international currency exchange brokers and their digital payment platforms, alongside the development of digital ledgers such as blockchain, represent opportunities for traditional banks to partner with these providers make giant strides forward. Customers have high expectations from their banking partners, with speed, efficiency and innovations being at the top of their list. If the traditional banking system fails to keep up with fintech, it could lose valuable customers to its more agile competition and new market entrants.
