Ep.12 Barry Dowling – TransferMate Global Payments - a podcast by Heather Smith|CAANZ | ACCA |Xero | QBO

Ep.12 Barry Dowling – TransferMate Global Payments – Minimising costs and complexities associated with foreign currency payments seamlessly from with Xero

Highlights of my conversation with Barry Dowling

·        Spending time to understand your client

·        Using client feedback to tweak the solution offered

·        Achieving the milestone of $5US billion in transfers

·        Using referral links as a marketing strategy

Subscribe to Episode 12 of Cloud Stories on iTunes:

https://itunes.apple.com/au/podcast/cloud-stories-heather-smith/id908333807

Transcript

Heather:        Heather Smith here. Welcome to Cloud Stories. Today I’m talking with Barry Dowling. Barry Dowling is the cofounder of TransferMate Global Payments. He is dedicated to making the process of booking foreign currency payments seamless, easier, faster and cheaper. TransferMate Global Payments is a global Fintech company that provides integrated solutions enabling companies to seamlessly process international payments. They provide a 24 hour phone service and online systems to enable clients to seamlessly process their foreign currency payments. They sync with Xero, enabling Xero users to cut down on wasteful double entry and transaction costs when processing payments.

Whether your business is based in Australia and looking to transfer funds to China or based in California and transferring to the U.K., TransferMate has the widest collection of payment licences worldwide, enabling their team to assist clients get a better deal than using their bank.

I started by asking Barry who is his favourite super hero and why?

Barry:             Who is my favourite? I really didn’t expect that question to be honest. I can’t help get Wonder Woman out of my head which is not saying too much but I’d have to stick with Wonder Woman. It’s the first thing that came into my head.

Heather:        Sensational. You’re not into super heroes then?

Barry:             Listen, I like them all to be honest with you. Wolverine, I’d be a big fan of Wolverine too but listen, to be honest with you, as a kid growing up in the 80s, Wonder Woman would have held most of our fascination, so I’ll have to stick with her.

Heather:        This is going to timestamp this interview but you must be excited by the news, the Spiderman/Wolverine news that came out yesterday, that they’re now allowed to be in the same shows together.

Barry:             Oh, I didn’t realise they were prohibited from that before, were they?

Heather:        They were owned by different companies. The comics were owned by different …

Barry:             Marvel and …

Heather:        Sony. Something Sony, I’m not exactly sure of all the details but I know that now they can appear on shows together.

Barry:             Well, all I know is whoever is behind the marketing of Lego is destroying our bank balance with our kids. Every superhero Lego character is there.

Heather:        Cool. You’ll have to turn it into little videos for your products and then you can have it as a tax deduction. Yes, they always go viral those videos do.

Barry:             That’s a very good idea.

So Barry, you cofounded a business called TransferMate Global Payments. Is that the full name of it? Is that correct?

Barry:             That’s right, yes. It’s generally referred to as TransferMate. As the name suggests, ultimately our core service is to help clients transferring money. At the moment, still about 90% of companies would use the bank. There’s a better way to do it. Quite often businesses get caught up with naturally running their own business and taking care of sales and dealing with inventory and everything that goes with that, and in terms of all the daily activities, making the payment is kind of the one that slots in as a once a fortnight, once a monthly activity.

It doesn’t get as much attention but when you look at it, it’s quite apparent that the banks charge too much generally, as a general rule of thumb.

Heather:        Absolutely. So you would probably be in agreement that businesses don’t think about the actual cost of the payment involved, it’s kind of like an afterthought.

Barry:             Well, I think that it doesn’t help that the banks are less than transparent. Quite often if you do a transfer to the bank … we’ve checked with all the banks in Australia, and as a general rule of thumb, without naming banks, the fees are typically anything between $22 and $35. You can even look at let’s say … we’ve talked to Xero clients in the States and one in particular is paying their US bank $80 for no apparent reason, and it’s sometimes just rolled up in a monthly fee but typically $22 to $35.

But that’s not really where the loss is. The loss can be seen in the exchange rate and the exchange rates can ultimately be beaten. Quite often what you’ll find is a company will say, “You know, I’m inclined to do …” if you’re a Xero partner and you have clients that do foreign currency payments and you speak with them, quite often the client will do what they’ve always done.

The whole idea of cloud accounting broke that myth and has revolutionised accounting. In the same way, this should really do it for the client. I suppose all the client really needs to see is a comparison cost to really get themselves interested.

Heather:        Yes, absolutely. So what you’re saying is there are two expenses involved: both the actual charge and then the exchange rate, and it’s understanding there are better alternatives out there.

                        Go on, sorry, I didn’t mean to cut you off.

Barry:             I was just going to say, technically there’s three: the exchange rate, the sender fee and the receiver fee.

Heather:        Yes.

Barry:             So if you’re an Australian business making a payment to the UK, the UK bank in addition charge a fee too because the beneficiary receives the payment and the bank says, “You know what, I’m going to charge you for receiving that.” Why? Because you can’t do anything better.

Heather:        Yes.

Barry:             So what we’ve created is a bank-to-bank network worldwide. We have bank accounts in 90 countries. When we make a payment to the UK from Australia, as one example, we pay out of our UK account. So we receive in Australia and pay out of the UK.

Heather:        Okay.

Barry:             That way it avoids all the international fees altogether. We’re effectively using our own clearing system.

Heather:        Excellent, yes, and you are unaware of that. I know I’ve dealt with business and we’ve paid the business, and then they’ve said, “Yes but you owe us another $20 after you’ve paid them like $20,000,” and you’re like going, “Seriously? We paid everything we were supposed to pay there,” but we didn’t realise that was happening.

What inspired you to start TransferMate Global Payments then?

Barry:             I suppose we’ve been involved with a number of online businesses in the past. It’s only really when we got a chance to look deep down at the rates and the fees the banks were charging that we realised that there was a better way to do it. I suppose back in 2010/2011, we had quite a number of corporate clients that we felt needed a service that would beat the banks. At the time there was one licence required to operate this service.

So we took about six months to get the licence and it was very much a … there wasn’t very much technically involved. We were basically dealing with the banks and we’d get a wholesale deal with the banks and we were able to … the same way a wholesaler gets better pricing for a product and can pass something on to the retailer, we had the same on our setup.

Then I suppose over the years we advanced. We now transfer $5 billion US dollars on behalf of clients worldwide.

Heather:        Wow.

Barry:             The system that we built automatically prices up wholesale banks. A lot of the banks we would have traditionally bought currency off can’t give us the currency at the rates we buy it off. So we’re now buying it, in many cases, at the same rates the banks are buying it at. With the volume you buy, you can really go in and get the best possible deal. The systems that we built are all in-house and they’re bulletproof. We set them up in 2010 and it’s just getting better and better and better. I suppose a natural progression was to integrate into the likes of Xero to make the whole process much easier.

Heather:        That’s really interesting.

What have been the biggest challenges and obstacles that you’ve faced running this business and growing this business?

Barry:             I guess a challenge is always getting the brand out there. I have to say, I guess it would be the case for a lot of services, it’s ultimately the idea of apathy. How do you convince a client what they’re doing today and have done for years … everyone knows a client – I wouldn’t say stubborn – but has run a successful business. They’re the boss. They’ve been doing something for 10 years and you walk in and you know where you stand with them in terms of accounts, “You do that but this is my business,” kind of way. It’s trying to convince him that there’s another way to do it without maybe telling the client, you know, any obligation.

                        We win over clients but it does take time. I suppose it’s that time that it takes because when we contact clients, they typically don’t have a payment today. So the analogy I use is it’s kind of like approaching a client after coming out of a restaurant and saying, “We’ve got a nicer hamburger.” They’d say, “Great, I’ve already eaten.” So the timing isn’t quite good. It’s a case of timing really.

Heather:        Yes, I know in situations where I’m dealing with businesses and they’re doing this, when they need to do the transfer, they have no time to actually think about doing it a better way, so they never have anything in place. They also just keep going through the same old process. I know I’m quite detailed in that I split out all the expenses related to exchange rate both movements and charges, and they really, really add up, and they’re just straight off the bottom line if you’re not monitoring them.

Barry:             That’s kind of interesting. From a Xero perspective, and Xero handles foreign currency far better than most accounting packages out there …

Heather:        Yes, love the way it manager multi-currency in Xero. Love it.

Barry:             It’s brilliant. But nevertheless, if you have say 10 payments to make today, when it comes back to actually making those payments you have to go into your online banking, make each one individually, then you have to go back to your account software, change the exchange rate, account for the bank fees.

Believe it or now, for each payment, it probably takes about five minutes. You can do it faster if you rush but it probably takes five minutes. With the add-on that we created, you can literally click a button, log in, it pulls 100 payments in for example, shows you the live rates, the fees are automatically 75% cheaper than the bank, you click one button and it does all the auto posting of the currency loss, gains, bank fees, and the payments directly into your account software.

Heather:        Excellent.

Barry:             It’s much, much more time efficient, and funnily enough, that’s the part the clients really like.

Heather:        The time efficiency.

Barry:             Yes, because the fee thing, they can kind of get over the $10 or the $15 or whatever they save in fees but what they see is the hassle gone. That’s what they really like.

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