Hey Yall! I'm here on a late Friday morning, engaging in a discussion with my product team about why Banking as a Service (BaaS) platforms and Neobanks should consider routing their international wires through a global payments API rather than relying solely on their partner banks.

Our conversation got intriguing quickly, prompting me to expand on last week's post and shed light on the significant issues and challenges our peers in this space are encountering.

In a nutshell, most, if not all, of the underlying BaaS banks are local community or tier 2/3 banks. They were purpose-built to cater to the domestic U.S. market and usually don't have their own global payment capabilities. While serving this market, they have inevitably received requests to send wires internationally. Typically, to facilitate this, these banks end up processing their wires through intermediary institutions like bankers' banks, who then further process them through major banks like Wells Fargo or BNY Mellon.

The problem here, as many of our BaaS and Neobank customers have experienced, is multi-fold:

1. High Costs: Since most of these banks do not process international wires themselves and rely on bankers' banks, the pass-through costs can be exorbitant. They often pass these fees along to their customers, leading to significant expenses.
2. Lack of Transparency: If you've worked in the banking industry, you're familiar with the stereotype that things take a long time. Dealing with a bankers' bank for returned wires, wire traces, or compliance requests can result in delays lasting several days. In today's world of Fintech innovation and heightened consumer expectations, such delays are no longer acceptable.
3. Serviceability Constraints: Due to recent scrutiny from regulatory bodies like the OCC, BaaS banks have tightened their restrictions on who, what, and where they can serve. When it comes to international wires, customers desire the flexibility to send money wherever they want (within legal boundaries). If you continue to process through your partner bank, you may face limitations based on their risk tolerance, which is tailored to domestic rather than international purposes.
4. Lack of Expertise: Processing international wires through your partner bank often means dealing with teams that lack expertise in international payments. While they may excel at handling domestic wires, they may encounter difficulties with international transactions, leading to compliance issues and subpar customer experiences.

So, if you're considering alternatives to processing wires through your partner bank, where should you turn? The answer lies in partnering with purpose-built global payments companies like Monex, Corpay, Nium, Routefusion, CurrencyCloud, and more. Why, you ask?

These companies have been meticulously designed to excel in international payments, boasting comprehensive compliance programs, extensive banking networks, and reliable payout partners. This translates to an enhanced overall customer experience, encompassing better pricing, improved serviceability, and enhanced deliverability.

But how do you choose among these companies? I can make it easy for you. Routefusion has established partnerships with virtually every renowned global payments provider in this field. We've conducted rigorous product analyses and vendor procurement processes to bring you the cream of the crop. We've bundled it all into a unified API, delivering only the best capabilities from these global payment providers to you. Here's what you can expect from our Global wires:

• Automated MT103 Receipts via Our API: After your customer sends a payment, you receive a downloadable MT103 immediately.
• Exceptional International Wire Deliverability Rate: Our international wire deliverability rate stands at an impressive 99.998%. We've diligently navigated the best routes through top-tier providers over the years.
• Direct Wire Settlement Through Leading International Banks: We facilitate direct wire settlement through major international banks like Chase, Bank of America, and Goldman Sachs.
• A Team of Global Payment Experts: Our team comprises individuals who are not just bankers but also a rare hybrid of tech and product experts with the necessary banking and payment experience to help you build the best product and offer exceptional service to your customers.

In conclusion, my aim is to empower the Fintech products of the future to be extraordinary. I firmly believe that achieving this involves collaborating with the right API banking and payment vendors to deliver the ultimate experience to your customers. One of the most critical aspects of your BaaS or Neobank's offering is international wires. To provide the best product, work with the experts purpose-built to handle these types of payments, just make sure its Routefusion you decide to work with 😉.

I hope you've enjoyed the read and contact me here to learn more.

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