Fintech Insider Podcast by 11:FS
00:14:52 · Benjamin Ensor
[00:14:52] S0: part of why you didn't try to do this at JP Morgan? Because I was struck how you described JP Morgan as I think you said the greatest firm in the world, right? Is there something here that couldn't have been done by JP Morgan? Because obviously JP Morgan has sort of embraced FinTech more than many established banks. Clearly Jamie Dimon and others understand the potential of FinTech at least. Was this something that couldn't really be done by a bank?
00:15:18 · Jeremy Balkin
[00:15:18] S4: You know, I no longer speak for or on behalf of JP Morgan. Obviously, But I will say that, you know, I had a pretty big day job to say the least there. That was pretty full on and leaving that was the hardest decision of my life. I don't understate the importance and the meaningfulness of serving a firm like JP Morgan. I'm a better professional because of my time there. I've learned more because of my time there. But the reality is that JP Morgan is the most systemically important financial institution and bank on earth. Banks business models are fundamentally different from forget TodayPay, just generally speaking FinTechs in over themselves. I think the role of banks to sort of take a slight step to the side, the role of banks are incredibly important to help FinTechs or payment companies or technology companies like ourselves in different ways than their core business model. That's why I think it's such a complimentary alliance and partnership that the roles, the banks like JP Morgan have played with many others. So it's not really a fair question to say, why couldn't this have been done there? It couldn't have been because it'd be a completely anathema and completely different to the core business of what the firm does and what we're trying to do. And hopefully one day we'll be really successful in. So I think that's just one important sort of distinction there. But I think at the end of the day, you have to also look at the structural, why does this problem exist? Like who benefits from the problem? And I think inefficiencies in payments any more than the speed, like who benefits from a slow payment? Well, in many cases they are the play, that's one of the reasons one has to look at the structure of this problem. And if you think about the role of a bank, by nature, a bank business model is to hold deposits. And so the longer one holds a deposit, more interest and investment income the bank or the financial institution accrues rightly so that's their business model. So it's not a case of, it would just simply have been impossible to do. Suffice it to say my personal situation, I told my colleagues that there was some personal risk in my life that I wanted to take. There was a few ideas that I wanted to pursue. This is just one of them. And the time was right, I was 39 years old, two young kids.
00:17:33 · Jeremy Balkin
Although everyone keeps reminding me a mortgage, a wife, a house, a family, family in Australia. You must be absolutely certifiably mad to walk away from the comfort of JP Morgan to go and suffer as a startup founder. But so far it's been a good trade and I've got so many family and friends left behind at JP Morgan that our journey together is not over. In many ways, this is just the next chapter of it.
00:17:56 · Benjamin Ensor
[00:17:56] S0: Fabulous. Well, of luck. It's super, super exciting. Unfortunately, we're gonna need to move on to our next story, but really, really interesting and promising. Okay, so our next story is that Airwallex is continuing its Latin American expansion with the acquisition of Mexpargo. Airwallex has agreed to acquire Mexpargo, which is a payment service provider based in Mexico as it continues its expansion throughout Latin America. Mexpargo was founded in 2014 as a payments platform enabling merchants to accept a number of modern payment types via a single platform. The acquisition comes as Airwallex's market value tops 5,500,000,000 US dollars following an additional $100,000,000 of series E funding last year. Airwallex recently reported year on year growth of over 400% in The Americas as it increases its footprint in Latin America. And just a few days ago, Airwallex released another report highlighting the unmet needs of small and medium sized businesses to provide cross border payments throughout the region. According to, and I'm gonna get this name horribly wrong, Sopranay, you'll have to correct me in a moment. According to Ravi Adusumili, is the executive general manager of The Americas at Airwallex. He said, with the acquisition of Mexpago, we're on a path to become the number one payments and financial platform for modern businesses to go global. So Pranav, I'm gonna come to you both to correct my pronunciation, but also to tell us more about this story and the ambitions of Airwallex as a business.
00:19:26 · Pranav Sood
[00:19:26] S3: Well, I don't think I can correct your pronunciation. I think you did an absolutely knockout job and Ravi will be delighted that someone tried to even pronounce his surname, let alone succeeded. Look. The Mexpargo acquisition is is really exciting for us. We are at heart an infrastructure company, and our our product is an extremely global product, which allows our customers to be able to collect and pay out all around the world. And, you know, the last few years for us have been a journey of building out that coverage and and building out the reach that that we have as a business. Even this year, you know, we've expanded geographically. So in my region, we've we've expanded into Israel. We've expanded across Europe and and so on. And for us, as we look at, the the the kind of pathway to continue to grow, it's gonna be really important to keep on filling in those gaps that we see in in our coverage and in our infrastructure. So, Mexico, you know, why is it exciting? I think there are two reasons or maybe even three. One is Mexico itself is an incredibly exciting market. I'm sure, Ken, can see Kate nodding there. But Mexico is, you know, it's a 130 odd million people. It's The US's second biggest trading partner. It's, I think, in the top two or three global recipients of remittances, and it's got an incredibly young and and very, very well attuned population who are more and more used to buying things, you know, online, buying things from overseas. And it's a market that's ripe for some of the disruption and change that we've seen elsewhere in the world. So places like The Middle East, for example, where you've seen very similar structural changes. So Mexico itself, extremely interesting market. The second thing is when you think about some of the, you know, the demand that we're seeing from, our customers, our software customers, and and fintech customers around the world, they want to be able to get access to that market, you know, from outside. So they want to be able to send money and receive money and and and to be able to do that quickly and and efficiently. And and thirdly, you're seeing... It kind of alludes a little bit back to the conversation we were having earlier with Jeremy around the ecommerce world. You're seeing, I think, a trend towards reglobalization.
00:21:30 · Pranav Sood, Benjamin Ensor
So people moving supply chains and moving hubs away from some of the traditional places that they've been in Southeast Asia and to new places, you know, Mexico being being one of them. So for all those reasons, it was a very, very obvious place for us to want to to invest. And, of course, I should say this is still subject to regulatory approval, so there's still some work to to do until we can, to finalize this one. But this acquisition is is one for us that gives us a brilliant team, access to, you know, the licenses that that the Mexpago team have gone and got, and also access to the the the kind of clearinghouse that the system is SPEI, which is the the local payment rails in in in Mexico as well. So we're hoping that all of that together gives us a really nice springboard to continue to grow our infrastructure, and hopefully access to what I think is one of the world's most dynamic, and interesting markets. [00:22:20] S0: And a quick question just to build on that. What what does an acquisition get you that a partnership wouldn't? Because obviously you've got a number of partnerships around the world and so on. Are there things that you can do because you're acquiring or hopefully acquiring Max Pargo that you wouldn't be able to do if you had just, let's say, just partnered with them?