The MoneyPot
00:08:36 · Pranav Sood, Medhy Souidi
[00:08:36] S1: That's quite right. [00:08:39] S2: I would like to ask you a question because Airwalex was created in Australia and after this move to Hong Kong, go global in Asia, and now you have also the office here. Do you see on that kind of money movement a difference? You touch it a bit here, but I would like to go on a deep dive. Do you see like a very difference on how people use your platforms in Asia and in Europe, for example? And do you see like some trends for money movement in Europe or in Asia that are very different from each other?
00:09:07 · Pranav Sood
[00:09:07] S1: So I think the, yes, of course, there are differences in the rails and in the payment preferences that you see across borders, but there's a lot of consistency in the actual use cases themselves. So fundamentally, you need a financial operating system to be able to manage your money in, your treasury, your FX and your money out. And people may choose different rails in and they may choose different rails out, but the core of the use case is very similar. Similarly, we were talking a lot about the SME side of our business. We also have a big platform side of our business as well. I mentioned Sheehan as a good example of a customer like that in e commerce. They're about as far on the other end of the spectrum of scale as you can get from a mom and pop shop selling t shirts or candles online. And they have similar problems. They're trying to optimize for their authorization rate performance. They're trying to make sure that they can have redundancy and diversification in their stack, but they don't want to go and build 20 different infrastructure solutions to accommodate that. So I think in answer to the first part of your question, yes, of course, there are differences in preferences. But I think in terms of the actual core use cases, there's a lot of replicability, which is part of the reason why we've been able to scale so quickly. In terms of then the trends and what are we seeing, I think, again, there's quite a lot of consistency in the trends that we're seeing across both Asia, The US, and also here in EMEA as well. A couple of big ones that are coming up, and I'm sure your other guests have talked about this as well. But number one, people looking for diversification in their financial stack, whether that's from an acquiring perspective, whether it's from actually more of a banking perspective in light of of what happened with SVB and and what's been happening across The US with some of the community banks. Number two is that kind of ironic, but, I think, also valid combination of things. So people are looking to diversify. They're also looking to consolidate. And lots of CFOs, lots of chief product officers have woken up and of seen that their buyers have gone out and acquired 10 different fintech services over the last ten months.
00:11:07 · Pranav Sood, Medhy Souidi
And now suddenly when they're looking at cost consciousness and margin, they don't necessarily see the value in having all of those. So people like us who can do everything suddenly come into our own. And then I think the third thing that we're seeing a lot of is the embedded finance side of things. And it's really two aspects. So one is bundling. You know, increasingly, software businesses are finding it harder and harder to defend their margins and to grow their user bases. And so being able to bring in financial services on top of software becomes very compelling. You know, a great example of that is Papaya Global. They've done a fantastic job of of this. They're, you know, at heart, a payment software business, but they've very successfully integrated payments and money movement into their proposition, which makes their their use case much, much more compelling for the people that they're selling to. The other piece is, of course, in expansion into new services or new service lines. And, of course, everybody wants to have the the maximum wallet share of the customers. It's very difficult to have that because, you know, there's there's only so much wallet to go go around. But from our perspective as an infrastructure provider, we're delighted to be able to power those use cases because we think it's a great fit, and it makes great use of all of the regulatory licensing and payments infrastructure that we've got and built. [00:12:23] S2: Very interesting.
00:12:23 · Medhy Souidi, Rachel Morrissey
[00:12:23] S2: Very interesting. [00:12:24] S0: I was struck by what you just said about the nature of of this consolidation going on. When you're looking at this... I mean, obviously, Airwalks is in a really good position for this, but you also have a number of partners that you work with. So when you are looking at partners and you're trying to figure out where to go or what to do, what are the kinds of things that you key into? Because as fintech partnerships grow, you're going to either see mergers and acquisitions in this area, or you're going to see, really intense partnerships. And so I'm just curious, what is it you are digging into there?
00:13:03 · Pranav Sood
[00:13:03] S1: Yeah, so we have two different types of partnerships. One is what I would call financial partnerships. We partner with 60 plus banks and FIs around the world to give us access to the products that they have in different markets, whether it's the virtual I bands or physical I bands, whether it's payouts, whether it's whatever. We have that whole network of financial partners. We also work with a lot of, I call, strategic partners. And those strategic partners could be software platforms. So I mentioned Xero. We also work with people like Shopify or WooCommerce and many, many others of that nature. And then we work with more like a bigger platform. So whether it might be something like an Amazon or Google or whoever to find ways to be able to package and distribute our products together to the customers that we want to work with. And then sometimes, of course, we also have other software providers that we're working with. So when it comes to, for example, KYC or KYB, you have to partner with others to give you access to some of the data that you need in order to do those checks. So from our side, partnerships is incredibly important. It's very difficult to scale really quickly unless you can partner effectively because you don't really want to be in a situation where you're building everything for yourself from the get go. When we look at partners, and let's focus on each of those three categories very quickly in turn. Financial partners, it's access to the underlying products and services, but it's critically also the flexibility. Many banks out there will give you access to a particular rail. Not that many of them will give you access via a really high quality API that has fantastic uptime and also has the flexibility that allows it to be combined with other things into a consolidated whole. Strategic partnerships, we're really looking for the mutual value proposition and benefit. I think it's a truism, but it is true. The most successful partnerships tend to be the ones where both parties are benefiting. And so we're looking for opportunities to solve real problems for our partners' customers in a way that generates value for the customer, for our partner, obviously for us as well. Is there is a great example? They have lots of customers who are looking to make payments around the world.
00:15:11 · Pranav Sood, Medhy Souidi
And so if we can facilitate that, that's solving a big problem for everyone, and we're all able to benefit as a consequence. And then the software side, when we're thinking more about our own services, so things like KYB, KYC, again, you're looking for the breadth of coverage. You're looking at the depth of data that people are providing. And crucially, also, it's a very competitive market, so you're looking at the price. And I think the benefit for people like us who are buying at scale is that we're able to bring purchasing power and hopefully negotiate great deals with our partners as well. [00:15:43] S2: Yeah? Acquirer, transact and engage. That's what we say in DBS as well, for example. [00:15:49] S1: Yeah. Exactly. Yeah. [00:15:50] S2: I have a question for the future, but I don't know if you want to do Okay. I can go ahead. What is the future for you for programmatic money? What do you see as a trend and coming in the next couple of months, maybe, or next years?