Q1: Before we begin, please provide a brief background and introduction to the readers, Rocky:
A: Of course. I’ve been working with technology most of my career and wholesale payments most of the last decade. Most recently, I was leading JPMorgan’s FX payments business in their transaction bank.
Q2: With your extensive knowledge of the FX market, do you feel that the SMB’s are being adequately serviced by the existing payment platforms? Please elaborate. (i.e. if yes, why, If not, why not?)
A: Generally, no. The products and services offered in today’s FX market were built for much larger companies and institutions – and this made sense because they make up the bulk of the FX market – probably more than 90 percent. But these products and services don’t meet the needs of typically much leaner SMBs that don’t have the technical resources or FX knowledge to use these products effectively. The unfortunate reality is that SMBs have been forced to buy products built for someone else – and that’s never good.
Q3: Can you walk us through a typical experience of a small business that is trying to send money abroad through the bank?
A: The typical experience for a small business sending money abroad is complicated and too expensive. There are two simple questions that SMBs have that are very simple but almost impossible to really answer with the existing providers — when will my payment arrive and how much is this costing me?
Q4: What is/are the solutions to the existing problems, in your opinion?
A: There are three ways an SMB can solve this problem – 1) add staff to manually stay on top of these transactions, 2) put band-aids on the problem with some process workarounds and technology development, or 3) work with a new payments provider that is not encumbered by limitations on the existing system. I’d put Align and the blockchain in that last category.
Q5: Are there specific geographies you feel will benefit from the blockchain more than others?
A: The reality is that SMBs are not well serviced by the current FX providers anywhere around the world from what we can observe. But there are some emerging, less liquid markets where the costs of FX payments are so high today that the blockchain can really impact the bottom-line.
Q6: What in your opinion are the benefits of the blockchain as a payment rail?
A: The biggest benefit is that it allows a whole new set of players – like Align- to enter a market much more rapidly than was previously possible to offer innovative cross-border services. And in this case, its directly benefiting an SMB market that has been largely ignored by the marketplace.
Q7: Are there any pitfalls in using the blockchain instead of the traditional bank wire?
A: The wire is an outdated, expensive mechanism, but its longevity has given it the ability to send money anywhere in the world. The current limitation with the blockchain payments is the number of countries you can pay. But I’d expect that network will broaden significantly with time.
Q8: With such extensive knowledge of the FX market, what do you feel is the single, biggest threat to the traditional foreign exchange industry right now?
A: The biggest threat for FX payments is that most traditional providers are not giving their customers enough value for the prices they are charging. That’s not a sustainable equation as SMBs have increasingly larger cross-border flows and the barriers for new entrants comes down to provide these services.
Q9: In your opinion, will the banks embrace or reject alternative payments?
A: It depends on the bank. By and large, the majority of banks will be followers rather than leaders given that many of them don’t actually own their technology stacks which leaves most of them one step behind.
Q10: How do you see the future of the cross-border payment industry shaping based on what you told us above?
A: It’s a great time to be in the cross-border payments business. The industry is going to move from an expensive, antiquated, hard-to-follow bank product to a seamless experience providing real value that unlocks even greater global commerce.
Thank you for your time today, Rocky. It has been a pleasure speaking with you.