October 27, 2022
By Joe Schmidt, Seema Amble and Anish Acharya, a16z
As we write in our piece It’s All About The Money (Movement), moving money internationally is an opaque, fee-intensive process that requires two things: actually “moving” the money and leveraging onboarding and compliance workflow software. What’s often misunderstood about this process is that much of the cost associated with moving money across borders occurs in the compliance process. Banks must adhere to their correspondent banking partner’s requirements around KYC/KYB, AML, fraud, and CFT—all of which are a part of customer onboarding.
Today, there are no tools to help manage this process, as existing tools like SWIFT are generally incapable of supporting information sharing outside of basic account and amount data. Given this lack of tools and the ever-increasing creativity of bad actors on the global scale, banks are now derisking—that is, they’re not serving certain “riskier” customer segments, like international businesses, where it’s hard to ensure compliance processes are being enforced. Central banks have also been derisking by closing Nostro Vostro accounts for many correspondent banks, effectively eliminating many customers’ abilities to participate in a cross-border transaction. This has massive implications for banks. Not only are they losing potential revenue by not completing international transactions, but they are also losing customers to other competitors who do offer international payments.
These issues are why we were so excited to meet Gary Palmer, the founder of Payall. With 25 years of experience in payments, Gary saw the need to build a better cross-border processor that connects the paying and receiving banks into one global, multicurrency platform. His product replaces the malleable trust between financial institutions with rock-solid data. Payall’s platform compliantly automates the collection and sharing of data among financial institutions to solve for identity integrity, prove source of fund, and validate the economic legitimacy of payments.
At the end of the day, businesses are about the teams that build them, and Gary is exactly the type of founder and leader we like to back. He’s consistently built and sold payment processors for emerging forms of risk (Wildcard Systems, which sold to eFunds; eFunds to FIS; and Adaptive Payments, which sold to Mastercard) and the product he’s building now is totally authentic to his experiences. His sales acumen is second to none, and he fully appreciates how fintech and traditional banking need to work together to build a better cross-border future.
We’re thrilled to announce we’re leading Payall’s Seed round to help modernize cross-border payments. Payall plans to rapidly scale their team globally over the coming months as they look to serve the incredible demand from banks of all kinds.
Payall is one of our favorite types of fintech businesses—one that is built by industry experts to help incumbents solve massive problems. We’re so excited to join them on the journey.
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