Paysend is the latest digital money-transfer provider to launch a global account, in a market dominated by Revolut and TransferWise. Robin Arnfield talks to CEO Ronnie Millar
Paysend Global Account allows customers to hold, move and spend multiple fiat currencies globally using their Paysend card, and also supports several cryptocurrencies.
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Customers can switch funds between currencies using the Paysend app in real time, as they travel to different countries, and there are no charges other than FX rates.
“If you’re in Canada, and run out of Canadian dollars, you can instantly transfer some of your sterling funds to Canadian dollars, and our app handles the FX conversion,” Millar says.
Paysend Global Account, currently available in beta form, will roll out over the next few months. Its first product, the card-to-cardbased Paysend Global Transfers remittance service, is aimed at migrants and expatriate workers who typically send small amounts back home.It charges a fixed fee – £1, $2 or €1.50 – plus an FX rate per transfer.
“The Global Account is essentially an e-wallet,” says Millar.
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By GlobalData“It enables people to do three things: hold money the way they want to hold money, move money the way they want, and spend money how they want.”
Initially, the Global Account can hold US dollars, sterling, euros, rubles and Kazakhstani tenge, plus three cryptocurrencies: Bitcoin, Ethereum and Litecoin.
“The difference between the Global Account and our Global Transfers service is that, with the Global Account, you transfer money within your own e-wallet from currency to currency, rather than to someone else,” explains Millar.
Paysend currently has a Payments Institution license from the UK’s Financial Conduct Authority.
“If we lose our European passporting rights due to Brexit, we’ll apply for a European Payments Institution licence as well, so we can carry on trading in continental Europe,” says Millar.
Several members of Paysend’s product design team originally worked for Revolut, whose app allows users to hold up to 25 currencies on a Revolut card and offers fee-free transfers in 130 currencies at realtime exchange rates. TransferWise offers a borderless account that lets customers hold over 40 currencies and send and spend money abroad using the TransferWise debit Mastercard.
Whereas Revolut has 2.8 million users, and TransferWise over 4 million who have made over 2 million TransferWise debit card transactions to date, Paysend so far has signed up 200,000 users to its Global Transfers platform, having seen a threefold increase in Global Transfers users in the last six months.
In July 2018, Paysend raised $20m from investment firm MARCorp Financial and its existing investors to fund development of the Global Account.
“Money-transfer companies were a key focus of fintech investment in 2017, so clearly people are using these firms’ services extensively,” says Talie Baker, senior analyst at Aite Group.
Visa and Mastercard
“We’re direct Visa and Mastercard members, and also support China UnionPay (CUP) cards for our remittance service,” says Millar.
“Because of our membership of Mastercard and Visa, we do our own acquiring and processing on our PCI-compliant platform, and don’t use a third-party processor.”
Paysend uses the Visa and Mastercard P2P transfer rails, Visa Direct and Mastercard Send, for its remittance service.
“We opted for card-based transfers for our Global Transfer service rather than bank account transfers, because cards are now so prevalent compared to cash,” explains Millar.
“The reason people send funds to their relatives is so the recipients can spend this money, and they typically withdraw the funds using a card. So it makes sense to enable our customers to transfer funds direct to the recipient’s Visa, Mastercard or CUP card. We didn’t just want to offer a cheaper bank-tobank transfer service, but wanted to provide something transformative.”
As a direct Visa and Mastercard member, Paysend can act as issuer for Paysend prepaid cards linked to customers’ Global Accounts. Millar says the company’s development plan calls for it to develop B2B services such inbound and outbound business payments for smaller international online businesses.
He says Paysend will likely also eventually offer bank-account-to-bank-account transfers. In some destination countries, Paysend already supports card-to-bank-account transfers.
“We will be launching our business services in Europe later this year,” says Millar.
“This will leverage our payment-processing platform to enable businesses that sell abroad to receive payments in multiple currencies, for example via an e-marketplace.
“We plan to link our consumer-facing and business payment-processing platforms. This will mean that, if a consumer makes a purchase from one of our merchant clients, we can instantly offer the consumer a Paysend digital account and perform the KYC on them to let them make the purchase.”
“Paysend’s platform is very different from other remittance companies in that its primary product offering is card-to-card transfers,” says Baker.
“Card-to-card transfers can work in developing nations if the recipient has a prepaid card, since this is a safer way to receive money than picking up cash.
“The downside of card-to-card transfers is disclosing your card number to people, due to the fraud that may happen when someone gets your card account number. However, in Russia, for example, it’s common practice to give your card number to another person for P2P transfers, so maybe it’s not a big deal in other parts of the world.”
Baker suggests that Paysend should set up a directory for its remittance service that allows people to send money to an email address or mobile number tied to a card.
This would be a safer way to make transfers, she notes, while praising the app’s digital wallet function.
“The ability to hold money in different currencies is a plus for people who do a lot of international travel,” she says.
