In identifying the need for businesses transacting internationally, to do so faster and more cost-effectively than traditional banking services allowed, Saxo Payments set out to establish a platform capable of performing global payments (cross border & cross currency). This included creating the account structure, regulatory checks and FX handling necessary to deliver a genuine alternative for FinTech and their merchants.
It is a true game-changer in the payments sector – both emerging and traditional - taking a unique approach to the challenge of cross border transfers. And, crucially, it offers a compelling competitive advantage for organisations and their merchant clients looking to expand rapidly into new markets.
The problem
Cross border payments have not seen much by way of innovation – the process has remained slow, inefficient and costly. Traditionally individual currency accounts need to be created in every country in which a business wants to operate – with all the cost, time and compliance challenges associated with that process. Yet, whilst cross border transactions generate approximately 40% of the payment industry’s transaction-related revenues, there are a number of underlying reasons why the process hasn’t been re-engineered, until now.
The correspondent banking model, which is used to process cross border transfers, does not lend itself well to innovation - there are so many parties and steps involved. And increased regulation, as well as capital and profitability pressures, have deterred traditional banking service providers from investing in improving the process.
The result is that the conventional approach to cross border payments has a direct impact on operating liquidity. Not only are there high transaction fees and FX fees; the time it takes for payments to be settled can impact on a business’ cash flow while it waits for delayed payments to clear.
The solution
The Saxo Payments Banking Circle provides access to a global banking platform that makes cross border payments ‘local’ by using segregated international bank account number (IBAN) accounts in multiple currencies. Therefore, it cuts out the time traditionally taken for international payments, and also reduces the cost.
Using the Oracle FLEXCUBE on Oracle Managed Cloud Services, the Banking Circle has the inherent flexibility, scalability, high performance and security necessary to support the FinTech industry and its merchant customers.
The standards-based digital banking platform enables Saxo Payments to deliver a superior global service which meets stringent security protocols and is flexible to readily accommodate changing regulatory requirements. How it works
The Saxo Payments Banking Circle enables FinTech to offer their merchants the facility to pay suppliers and partners directly from a web interface delivered by them, in their name, powered by Saxo Payments – without any loss of time or cash. The ground-breaking solution ensures that financial regulation is adhered to without impacting business success. And the immense liquidity of Saxo Bank underpins the Saxo Payments proposition, giving payment providers the confidence and financial security necessary for their business operations.
The benefits
The Banking Circle enables FinTechs, from acquirers and PSPs to APMs and FX providers, to deliver immediate transfers to bank accounts worldwide at very low cost. Adding value to their own proposition, they can offer their merchants own-branded global banking services – enabling them to perform immediate cross border bank transfers and set up local settlement accounts worldwide for their customers at very low cost.
The evidence
Over 50 FinTech have joined the Banking Circle since its launch, including Tuxedo Financial Solutions, First Data, Credorax, Valitor and SafeCharge. And clear evidence that it is performing as a fundamental back office utility was demonstrated by the recent success at the Emerging Payments Awards where it was named Best New Back Office Innovation and Service Organisation Supporting the Payments Industry Awards, as well as Most Disruptive Payments Technology at the Payment Awards.
About Anders la Cour
Anders la Cour is Chief Executive Officer of Saxo Payments, a subsidiary of Saxo Bank. The innovative new Saxo Payments Banking Marketplace enables immediate transfers to bank accounts worldwide, empowering businesses seeking to exploit the global digital sector.
About Saxo Payments
In 2013, Saxo Bank formed Saxo Payments A/S, capitalising on Saxo Bank’s core capabilities within the non-cash payments market. Registered as a payment institution in the European Union, Saxo Payments specialises in providing global payment account transactions and foreign exchange services to payment providers, including acquirers, payment service providers, FX brokers, money transfer businesses, e-wallets, and alternative payment providers.
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