When financial institutions want to issue a debit card or credit card, they hire an issuing processor to help them with these services. In order to provide merchants with the ability to accept cards, they are registered with the Agzbi processor.
But when it comes to cross-border payments and international money transfers in general, banks have had far fewer choices, and for industry veteran Gary Palmer, this created an opportunity.
founded PayallA cross-border processor for regulated banks, in 2018. The Miami-based startup has built what Palmer described as “very unique” software that gives banks a way to make cross-border payments for their customers.
“If a bank has a customer that pays thousands of people around the world, it’s almost impossible to do that through a bank today,” Palmer said. “We’ve built UIs and APIs that make it easy.”
That also allows businesses to automate the process.
“Our mission is to protect the safety and soundness of cross-border payments. And I can’t stress that enough, because this category is considered the highest risk by regulators and compliance officers,” Palmer told TechCrunch.
Indeed, with the Covid-19 pandemic fueling remote work globally, the need to offer cross-border payments to businesses and individual customers has never been more pressing for banks.
And that’s what attracted Andreessen Horowitz (a16z) a general partner. Anish Acharya, To lead Payall’s new $10 million seed with $8 million.
The company faced the problem in the work around “default international” banks want to facilitate more cross-border financial movement – especially as the world becomes more and more.
“We were scouting the ground, and we ran into Gary because he’s one of the few people who has experience building real payment projects,” Acharya told TechCrunch. “One of the biggest things we’ve learned is that most of the cross-border payments are compliance problems over the money movement. And Gary shared a similar thesis.
Instead of competing with banks, Payall is a cross-border payment platform that differentiates itself from other startups with White marking them on the software.
That software, Palmer said, will give clearinghouses the ability to know their client’s client and feel more confident in executing the transaction, because currently the clearinghouses may hesitate because they don’t know who the foreign bank’s client is.
“We want to make sure that the product is inclusive — and that banks can efficiently deliver money to anyone on the planet, even if they don’t have a bank account, and in real time and at low cost. A standard cross-border product is through a bank,” Palmer told TechCrunch.
The recipients can choose to receive payments in different ways – either to their digital wallet prepaid cards or in their bank account.
Palmer knows a thing or two about fees. In the year In the mid-1990s, he co-founded Wildcard Systems, a prepaid card processor that was acquired by eFunds for $250 million in 2005. FIS purchased eFunds in 2007 for approximately $1.8 billion. Palmer founded Adaptive Payments, which was sold to Mastercard in 2015.
After concluding that he was inspired to start Payall There has been no innovation or marginal innovation in the cross-border payments space for over 50 years.
“This started to excite me because I had the opportunity to speak to a category where, unlike prepaid, which is a new category and a new product, $100 to $150 trillion is stored between a few banks,” Palmer told TechCrunch. “There were a lot of fintechs thinking about how to do this business from a bank because it’s very inefficient. So I thought I should apply my 20 years of experience working with financial institutions to cross-border payments and international money transfers.
Additional participants in the seed funding round were Motivate VC with PS27 Ventures and Bridgeport Partners, RRE Ventures and Transcard with Safe Conversions. A group of strategic individual investors also participated in the latest financing.
Payall has raised $8.2 million in pre-seed funding and Safe Finance.
For 16z Acharya, who helps lead the company’s fintech team, Payall represents the case that “banks are here to stay.”
“There are areas where internet companies are better and where banks are set up to be successful. And when it comes to serving a lot of smaller clients — especially overseas — they already have the connections. So it’s about helping them provide those capabilities rather than competing with them,” he told TechCrunch.
