The fintech company Iban First entered the German market in mid-January. The subsidiary of the Belgian parent company of the same name specializes in supporting SMEs with cross-border payments and, in particular, managing the currency exchanges involved in remittances.
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Iban First targets SMEs
The Managing Director of the local branch is Mark Elser, who most recently headed the corporate customers’ branch in Nuremberg for LBBW until August 2020. “We want to make payment transactions more transparent,” he said. “The data is there, we’re just making it visual.”
Iban First has opened its first office in Munich. Elser plans to add a second location in a major German city this year, with a total of about 25 employees by the end of 2021. Iban First specifically sees a gap in the market for smaller SMEs, as FX business is often not profitable for banks in this segment. “Our sweet spot is companies with revenues of up to $60 million (€50 million),” Elser said. However, outside of Germany, he added, they also have much larger customers.
Smaller companies, mostly family-owned, often have no hedging strategy at all, Elser explained. For example, many smaller companies transfer money to China, “but then they don’t see what the exchange rate was until the statement,” Elser says. “With us, the customer sees in real time what the FX cost is, and therefore how much the transaction cost.”
Data from GPI Swift and Sepa
Iban First also offers its so-called payment tracker in Germany. According to Iban First manager Elser, that enables treasurers to see where in the world the transferred money is currently located. “Then you don’t have to call the corporate account manager to find out what the status is.”
Iban First feeds its platform through officially available data, such as from the GPI Swift network or Sepa. It can be used via a browser or even through interfaces (API). Because the currency management fintech is PSD2-accredited, it is also possible to view account information from third-party banks and start payments from a bank account, Elser says. Opening an account is free, he adds. “We make money mainly from the currency business,” the ex-banker explains. “We add a margin to that.” However, he does not want to reveal where that margin is.
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First published in DerTreasurer, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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