Fintech Insider Podcast by 11:FS
00:24:24 · Benjamin Ensor
[00:24:24] S0: Jeremy, what do you think of, do you agree with Pranav's point that Mexico is not only super interesting as a market in its own right, just because of its sheer scale, but also because of that sort of that near shoring, it's importance to the American economy, the Canadian economy. What do you think?
00:24:40 · Jeremy Balkin
[00:24:40] S4: First things first, think let's just take a step back. Few outside of The Americas truly understand the scale of Mexico. You've got an economy of something like $1.3.1400000000000 of GDP. It's the world's top 20 economy. Population growth and economics data over the next sort of decade or two, Mexico is gonna be an economic force to be reckoned with. The second is one of the driving forces with the Mexican economy is tourism. And obviously payments in tourism for foreign guests wanting to seamlessly book those hotels, those restaurants and vice versa is key. So the speed of payments innovation that is becoming sort of digital native in economy is one of the, I think the tailwinds driving what Airwallex has done. And more importantly, think look at the manufacturing hub that is Mexico, something like 70,000,000 Americans speak Spanish. So that, you know, there's a border that's shared obviously, there's common culture in many ways. So this is a phenomenal growth story. And if you look at The Americas more broadly, you know, it's a phenomenal wave of innovation of venture capital investment of payment flows and FinTech. This is a great story that needs to be told more, I think. And shout out to Airwallex with Jack, you know, the Aussie founder as well. He's from the second best city in Australia though, should just say. Melbourne's the second best, not the best, as they often incorrectly tell everybody. Sydney would be number one. But full credit to Jack and the team for taking an idea from a piece of paper to execution and doing it at scale and making cross border payments be as seamless as a peer to peer payment in any home market. It's absolutely incredible what they've done.
00:26:26 · Benjamin Ensor
[00:26:26] S0: Pranav, Jeremy makes an number of amusing and also important points there. How important is the cross border angle to this, right? Because in Mexico, as Jeremy said, huge economy. Being part of the Mexican sort of e commerce ecosystem is fantastic in its own right. But how important is it to Airwalex that that cross border trade between the states in Mexico and between other economies in Mexico? How much is that a part of the sort of the logic for you?
00:26:51 · Pranav Sood
[00:26:51] S3: Hugely. Mexico is The US's second biggest trading partner after Canada, I think, and and not by much. They're very, very close, on that on that list. I think from our point of view, the the... You know, to to step back a bit from from the question, the main problem that we're trying to solve as a business is that we live in a more and more globalized world which the financial system has maintained its incredibly fragmented nature. And so the more that we can do the hard work of, you know, bringing together, knitting together the infrastructure in different countries into something that our customers can access really easily through a single set of APIs or or through... Even through a dashboard, the easier it is for people who are trying to grow businesses across borders to focus on doing that rather than focus on how do I open a bank account, how does this local scheme work, What do I need to collect in terms of documentation from my customers? And so that's what we're really trying to do here. And I think as Jeremy and Kate have said, Mexico just happens to be one of the most exciting markets in the world to do it.
00:27:53 · Benjamin Ensor
[00:27:53] S0: Kate, ten, fifteen, twenty years ago, we'd have thought of sort of HSBC or Standard Chartered or Citibank or into JP Morgan as the sort of the firms that were sort of able to tie different countries together financially and able to sort of enable cross border money movement. But increasingly it's firms like Airwallex. And if I don't mind mentioning a couple of competitors, know, Stryb or an Agen or whatever. Is that right? Are we sort of seeing the FinTechs actually becoming the way that money moves across borders?
00:28:24 · Kate Moody
[00:28:24] S2: Yeah, I think so. You know, suppose to go back to the conversation we're having with Jeremy about, you know, the refund process being broken, the international expansion process is broken. And we've seen that as kind of a major area of customer pain, customer frustration and customer inefficiency, you know, ever since I started speaking to these types of businesses when I first joined 11FS, you know, nearly five years ago. So I think there has been an understanding in these banks that actually there is a major problem here and there is something that customers need help with. But actually, you know, there are a lot of people in these organisations that would really love to fix this. But actually, when you scrape beneath the surface, a lot of a lot of these financial institutions, you know, despite it being a global bank, actually, there are lots of very separate regional and domestic systems. So actually creating this efficient system that runs across the whole is very difficult for a lot of these banks who are starting again, to go back to the topic earlier around how the world is going back to being more global. You know, these systems were built before the world was as global as it was. So it made total sense to have a system that was right for the market that you were in and didn't really think about everywhere else. So yeah, companies that are starting from now and building that infrastructure now have a totally different set of trade offs to make versus the ones that banks are making when they set up their systems all those youngsters ago. So, I think it's completely, but it's fascinating for me to see how far the likes of Airwallex can get because for that customer who, you know, that business that wants to expand, wants to grow, I think the default probably still might be in their heads that, you know, I should turn to my bank first. But I think the larger the likes of Airwollocks and all its competitors get, I think that that opportunity for banks is gonna rapidly slip away unless they do something fast. Yeah, a fascinating one.