" class="no-js "lang="en-US"> EXCLUSVE: "Playingtowin" - Alana Condratov, Freemarket in 'The Fintech Magazine'
Monday, April 15, 2024

EXCLUSVE: “Playingtowin” – Alana Condratov, Freemarket in ‘The Fintech Magazine’

Freemarket has built its cross-border payments platform around the needs of SMEs that struggle to find banking partners they can rely on. The company’s Business Development Director Alana Condratov understands what they really, really want

Cross-border payments are big business. Already sitting at an enormous estimated annual value of $190trillion, they are predicted to rise to up to $290trillion by 2030. A number of accelerating factors, from the ever-expanding impact of globalisation, to a new-found enthusiasm for working abroad, means cross-border trade has the potential to supercharge in theory, the growth of businesses of all sizes. But often not if you’re an SME.

That’s because they find it hard to access the most affordable, efficient and effective cross-border payment mechanisms.

And one segment in particular struggles more than most: those operating in verticals that are considered by major financial institutions to be too high a risk to bank. ‘Risky’ is not necessarily a comment on the character of these companies. In many cases, they inhabit an economic space whose services form a perfectly routine part of daily life, including financial institutions, money services businesses, and payment service providers. But, like online gaming businesses and forex brokers, they are all highly regulated.

The nature of the markets these companies inhabit means licensing around payment transfers, and ensuring their operations are compliant with regional financial rules, need particular scrutiny. As a result, traditional banking providers often simply do not have the appetite to process their money, or may tack on a suite of extra processing fees with little to no explanation.

Here the issue of a lack of transparency is even more acute than in the wider field of cross-border payments, due to the fact that these SMEs often have to rely on multiple intermediaries – many more than conventional businesses do – to complete a transaction.

Even among the vast majority of low-risk SMEs in the UK who depend on incumbent banks for cross-border payments, 55 per cent complain of ‘unfair pricing’ as their biggest pain point, followed by speed of execution at 45 per cent and reporting transactions at 42 per cent, according to recent research from ClearBank.

So imagine how much bigger the cross-border headache is for their ‘high-risk’ peers. A new class of fintech solution provider, however, has risen to solve

their challenges, offering cost-effective solutions that ensure these companies don’t have to trade at a disadvantage. Among those alternative providers is Freemarket, a cross-border and FX treasury management solution.

“These particular verticals are underserved,” says Alana Condratov, Freemarket’s business development director. “There are specific needs and requirements for each but most of the time they are to do with regulation, cost and lack of transparency.”

She believes giving them access to more cross-border payment rails and methods, including blockchain and stablecoins, new real-time payment infrastructures, and online payment marketplaces that open the door to multiple banking rails, will address those challenges. Freemarket has developed a platform that can connect many of those alternative methods for international transfers and, right now, it’s seeing increasing demand from its clients – and its clients’ clients – to make the payments in stablecoin.

“These particular verticals are underserved. There are specific needs and requirements for each but most of the time they are to do with regulation, cost and lack of transparency”

“There are more and more conversations in the market happening around stablecoins,” she says. “I think they will make cross-border payments more efficient. In the future, they will also be more affordable, and we see them becoming more mainstream.”

Freemarket is working to satisfy the demand it has seen for stablecoin-based transfers with fellow fintech BVNK, which, as Condratov describes it, ‘sits at the intersection of traditional rails and decentralised finance’.

“They stitch together this maze of different gateways through their platform and take away the headache of access to complex regulatory standards,” she says. “They are outpacing a lot of the traditional players out there, by using their API technology and platform to give access to multiple rails.”

As with most areas of finance, Condratov sees the market moving towards more bespoke solutions, with vertically-orientated real-time providers giving forex brokers, for example, access to a cross-border payment solution built for their specific business needs and the regulatory demands of their industry. She says this will force traditional players to pursue partnerships or lose a major chunk of the market.

Indeed, Bain & Co recently listed bank-fintech collaboration as a key driver in the finance space.

“The market itself is very open to collaboration,” says Condratov. “Traditional providers are really stepping up their game in terms of either creating their own solutions, or partnering up with fintechs to create a common solution to tackle the cross-border challenges out there. “[But] it is the fintechs that are the driving force behind providing solutions to meet the needs of SMEs.”

Royal flush of solutions

Meeting the needs of a growing global community as regulatory stakes rise

With the size of the global online gambling industry set to rise to $184.28million by 2032 (an increase of 190 per cent within a decade, according to Statista), operators’ need for a resilient international payment system has never been more apparent.However, the inherent tension in this is that, historically, the industry has been regarded as high-risk by many traditional institutions who are therefore reluctant to provide operators with cross-border payment services. A changing regulatory environment only makes these institutions more nervous.

The UK’s Gambling Review of 2020, for instance, took three years to publish a White Paper containing 20 significant policy changes, including financial risk checks with a target date for implementation of summer 2024.But it’s not just the UK.

Across the world, regulators are focussed on anti-money laundering, responsible/safer gambling and consumer protection as live studios and community-style online gambling products grow alongside more traditional ebetting, while gambling in the metaverse is just beginning and the crossover with online gaming continues.

According to Freemarket, the main challenges operators face arise from these regulatory changes requiring greater transparency. But the Freemarket mantra – ‘fintechs see opportunity where their traditional counterparts see risk’ – has fuelled its mission to better support the growing number of operators in this sector.

Targeting large but also, crucially, small to mid-size companies who particularly struggle to strike up workable relationships with big banks, Freemarket handles currency conversion across 40 (soon to be 100) currencies and settlement by drawing on the complimentary services of others in its peer-to-peer market, allowing it to circumvent traditional payment transfer providers such as banks if their FX rate isn’t favourable, but plugging into a global network of bank and non-bank financial partners, as well as local and international payment service schemes.

Virtual IBANs capture sales more effectively, which can help companies streamline their payment reconciliation, reduce errors and fraud, and improve cash flow with faster and more transparent payment confirmation and tracking – essential in an era where players pay digitally and expect instant payouts.

Other features include maintaining separate accounts for player and operational funds, managing global liquidity in real-time, and repatriation of funds in real-time across all intracompany accounts.

And all these solutions can be slotted into a gaming operator’s existing tech with an API integration. Importantly, Freemarket handles all the compliance and KYC, with comprehensive documentation for the secure and openAPI-compliant RESTful API and providing licensing requirement services.


This article was published in The Fintech Magazine Issue 31, Page 34-35

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