In late 2021, TransferMate launched ‘Global Accounts’, a way for businesses to build their own international network of bank accounts in multiple currencies and within multiple territories. As a multi-currency treasury solution, it allows businesses to have greater control over their international cash flow, make significant savings on FX and banking fees, and easily move into new territories and begin trading there.
As we approach a year in the life of Global Accounts, we talk to the person behind the development of the product, Jonathan Church, and discuss how TransferMate clients have been using the it across a variety of sectors.
If you want to jump to your particular sector or use case, you’ll find a menu below, but the conversation with Jonathan began with the basics – what is Global Accounts and how does it work.
Q. So, let's start at the beginning. What is Global Accounts and what does it do?
Global Accounts is a solution that sits on a single platform and allows the user to open local accounts in multiple currencies in real-time.
It gives you unique bank details in a large number of currencies and therefore helps you get paid in local currency and/or by local payment schemes, allows you to hold funds in different currencies, convert between those different currencies and payout across the entire T network in a broad range of currencies.
Q. How much money is flowing through Global Accounts right now?
We're processing multimillions of transaction flow every single month. The product's been growing rapidly with well over 100 clients onboard already, and what's really pleasing is we're seeing a massive variety of different customers and industry sectors using the solution.
Q. And what's the big takeaway for you from watching Global Accounts operate for a year?
One of the major things has just been the flexibility and the applicability to so many different businesses. Any business that has got multi-currency flows and international business can get value from the solution.
We’ve got everything from small charities receiving overseas donations through to large payroll businesses, a lot of international services and manufacturing businesses, commodity trading businesses… a real variety of customers are getting value out of the solution.
Q. And what's the biggest feedback you get from clients that have been using it?
One of the best bits of feedback has been about how straightforward the solution is and how quick it is to get up and running on the solution.
In the click of a few buttons or through a single API request, a customer can open a brand-new account
In the click of a few buttons or through a single API request, a customer can open a brand-new account with unique account details that they can use in their name, in whatever currency they need. That's rapid versus traditional bank account opening with traditional banks.
Q. I want to talk about use cases now, but before we go into specific industries, what type of organization should be looking at a product like Global Accounts? What pain points does it solve and who benefits?
It really is as simple and fundamental as any business dealing in multiple currencies.
If you’re getting paid in a different currency to the one that you operate with, report in and/ or borrow in your home market, or where you are paying suppliers or have payables in a different currency, or a combination of the two, Global Accounts will bring you value.
How Global Accounts is being used by businesses around the world
There are many common ways businesses are using Global Accounts, but we wanted to dive into specific sectors to see if we’re finding unique ways it’s being used.
- Banks and Financial Institutions
- Manufacturing
- Retail
- Payroll
- Procurement
- Charities and Non-Profits
- E-commerce and Online Marketplaces
- Trade, Receivables and Finance
Q. Let’s go into some specific ones now, and let’s talk about banks and financial institutions first. How are they using Global Accounts?
One of the earliest use cases was with a major international bank, and it’s also an example where that power of integration comes into play.
We had worked with them previously on building an international receivables solution. It was one of those classic cases where the bank leveraged our infrastructure so their clients could send payments through our network rather than the more complex correspondent banking network. We often say we’re the ‘Intel chip’ inside these payment chains – silently powering the payment process on behalf of our clients.
Transfers were quicker, more transparent, and more cost-effective for the bank and opened up additional FX revenue for them.
Global Accounts was integrated into this solution and used as a unique account mechanism to receive funds in local currency before they get converted back to the home currency of the client. These funds would then be repatriated back to their main bank account.
The upshot was that those transfers were quicker, more transparent, and more cost-effective for the bank and opened up additional FX revenue for them.
Q. Let’s talk about a sector like manufacturing. Where does the benefits come in here?
Manufacturing is the classic use case – it’s probably the one where the benefits are immediately obvious for anyone working in a manufacturing business.
So, several of our clients operate on a global level. They trade in multiple countries, in multiple currencies, and how they manage their supply chain is a core part to any success they’ll have. They need to be agile in terms of where they source materials and manage their international cash flow efficiently so they can have money in the right place and at the right time.
Of course, where you source supplies from is almost certainly different to where your customers are buying from, so multiple currencies coming in and out of your accounts is a fact of life.
With Global Accounts, having accounts that you can align to each of those currencies to be able to both receive into and pay out allows you to manage it all centrally through one single platform, add currencies whenever you like, and manage your overall positions between those currencies.
Q. Let's move on to retail now. What types of retailers have been using it and how have they been using it?
A good example in the retail space is a well-known sports branding company for a particular market in North America. They use the accounts to fund their payroll expenses in a local market.
They get paid in a whole host of different currencies, so they use our account infrastructure to be able to bill and collect in local currency from their clients.
They're able to support the business and fund through their Global Account in primary currency from where they're based, but then use our account infrastructure and our broader network to pay out in other currencies to support their business and their rep offices and their retail stores in another market.
Another example is international car sales and leasing. One operator we work with offers car sales and leasing across the whole of Europe. Because of this footprint, they get paid in a whole host of different currencies, so they use our account infrastructure to be able to bill and collect in local currency from their clients. They can then periodically convert funds back to their main currency and back to their main bank account where required.
Q. Let's talk about payroll. How does global accounts help with international payroll in particular?
Payroll is another perfect demonstration of where you can get real value from Global Accounts. It's one where you have single funding in a single main currency, but it's going out to many beneficiaries in many currencies in many places.
So, Global Accounts provides a mechanism to fund in a currency quickly, easily, and just in time, and then utilises the entire TransferMate network to make a variety of payments in different currencies.
We have some payroll companies who are even able to invoice for the businesses that they're doing payroll on behalf of and allow them to pay directly into the global account with TransferMate to fund the payroll they're doing on their behalf.
Q. Procurement. The big procurement platforms and individual businesses that do their own procurement (or use those platforms themselves), where does global accounts benefit them?
Yes, we work with world-leading procurement platforms and they’re a prime beneficiary of the Global Accounts solution.
Apart from all the benefits we’ve already outlined – that leveraging of our more efficient global payment rails - just being able to give individual merchants or individual customers a dedicated account to pay into and receive into allows segregation of business flows, segregation of currencies, and helps reconciliation all those payments in relation to procurement activities or disbursements.
Q. How about charities and nonprofit organizations?
This is another use case that's actually been more prevalent than we’d imagined. Charities obviously tend to rely on lots of overseas donations, so money is coming into them from multiple currencies, and then they disperse that money out to lots of different locations too depending on need.
They also don’t have to convert currencies multiple times when they have to shift resources around, which is a real cost-saving too.
For them, being able to have local accounts where their donors are allows them to receive money quickly and cost-effectively, and the same goes for when they are paying out. They also don’t have to convert currencies multiple times when they have to shift resources around, which is a real cost-saving too.
Q. I want to ask about e-commerce and online marketplaces, explain how it works there and who benefits.
In the e-commerce and marketplace space, there's two use cases around Global Accounts.
One is allowing payment into the account as an alternative to a card rail. This will save the merchant money, and that you won't have the interchange fees on a card. So, it allows them to receive funds in local currency and cheaper than those traditional rails.
The second use case is where online retailers and marketplaces are also acquiring transactions via card. The Global Account can be used to receive those merchant disbursements from the card schemes. This is versus the traditional way where those would be paid normally in a small subset of currencies prescriptively defined to the merchant. And then they will be on the other end of large FX spreads when receiving them into their bank account from somewhere else in a different currency.
So, they can receive in the local currency and then decide how they want to use those funds i.e. when they want to convert them and leverage the competitive rates that TransferMate's able to offer.
Q. When it comes to trade and receivables finance. Do you just want to talk through a little bit there?
This is a use case and a sector where we've got some very interesting ongoing conversations. The goal is to leverage Global Accounts for working capital financing. We’re looking at receivables financing solutions, where the funders and the financiers of the solutions can pay in quickly and easily in local currency into a global account in one currency, and funds can be seamlessly converted into the currency and paid away to the business that is selling its invoices, for example, on the other side.
So it allows both the seller of the invoice and the financier/purchaser of the invoice to both have Global Accounts and leverage those to make the movement of funds between them in cross currency happen faster and easier than it would through multiple traditional banking accounts and networks.
Jonathan. Thanks very much.
To learn more how Global Accounts can benefit your organization, contact the team.
