We’re living in exciting times, when payments are instant, mostly free and reliable. Borders seem to fade, and money is moving freely, with no delays… if you are an individual sending modest amounts to family and friends, that is. Or a huge corporation. But small and medium-sized businesses, who buy into the marketing talk of trendy fintechs, risk their funds being stuck in transit, mishandled or lost. And when the allure disappears, you’re left staring at a chat session with a robot. Sometimes for weeks, until your case gets resolved. So, why does this keep happening? Why haven’t fintechs, onboarding hundreds of thousands of clients per year, made the life of businesses easier? In this article, I’ll try to unwrap that.
Banks are getting more and more risk averse
Let’s start with the basics. Why do businesses have to search for alternatives to banks in the first place? Forgive me for the pun, but banks are not necessarily banking on you. With regulation across the world becoming more and more stringent, every new corporate client, especially one trading across borders, is seen as a potential liability. Banks might turn you away, if you’re not a resident in the country you’re trying to open a bank account, if your company is owned by another company, if you’re dealing with high-risk commodities like petrol, the list goes on. As regulatory legislature is extremely detailed, it all becomes a game of interpreting the rules. And, guess what, you don’t have much say in it.
A single bank can’t handle all your needs
But let’s say you manage to open a bank account that allows you to handle international payments. Everything goes well until you find yourself expanding to markets your bank is not working with. For example, they can’t offer you efficient and timely transfers to China or Argentina, where you’ve just found a supplier that’s crucial to your operations. What do you do? You find another bank that is able to solve your problem. Lather, rinse, repeat, and you find your business handling transactions via 10+ bank accounts. I know, because I once found myself in that exact situation when running my family business.
Neither banks, nor fintechs really care
The ability to quickly scale up usually means that a financial institution, be it a bank or your run-of-the-mill payments startup, has a large pool of happy and satisfied customers. If 1% or even 10% of them are having issues, there’s no impetus to immediately solve all of their cases. After all, those customers will either wait or leave, only to be replaced by new customers with hopefully fewer problems. Sure, some financial institutions offer unparalleled customer service, with several tiers of support staff being at your beck and call 24/7. But more often than not the only “person” you get to talk to you is a robot promising you to get back to your issue ASAP.
Is there a better way?
What unites both fintechs, no matter how progressive they picture themselves, and banks is the impersonal relationship they have with clients. Not knowing who to call in case of an emergency is not the best feeling when running a business. After seeing the flaws in both banking and fintech solutions with my own eyes, and having lost thousands in mishandled payments and spent hours waiting for someone to take my call, I came to the conclusion that there are many SMBs in the same boat as I was.
That realization led me to creating PayAlly — a payments company that brings a personal touch, dedicated account managers and an in-house AML team to the table. I’m not going to brag about revolutionizing this or disrupting that, because that’s not what we’re all about. What we do is offer expertise and an in-depth understanding of every client we onboard. Next time, I’m going to expand on what makes our approach work for clients with non-standard needs.