It is rare that a company would want to stunt its growth – but there is a logical reason for this. With a small company, employees and employers are more likely to communicate, but as it grows, understandably priorities shift to ensure the growth is sustainable.
This was a conundrum faced by 3S Money, a bank challenger that helps international businesses go global and trade with customers and suppliers, handling transactions in over 40 currencies and working with businesses in 190 countries.
Speaking to the company’s CEO, Ivan Zhiznevskiy, we learn about how the company was able to maintain its ethos while continuing to grow globally, offering a service to remove pain points in B2B transactions. He explains how an emphasis on providing fast and seamless payment experiences puts increasing pressure on businesses to ensure a secure environment and minimise fraud:
Tell me more about your company
Founded in 2018, 3S Money connects businesses to their customers globally by providing them with local business accounts to send and receive funds through all major payment rails. Our digital business bank accounts are designed for high-value payments, with 3S Money handling all aspects of cross-border payments and FX risk management. With enhanced due diligence, 3S Money provides true global coverage for many discerning corporate clients.
We service mid-market companies from over 190 countries, supporting their high-value international payments through our extended correspondent network; a market that is dramatically underserved by both the pure online players and big merchant banks.
3S Money has a ‘No Chatbot’ policy and every client has a dedicated client manager. With offices in London, Dubai, Amsterdam, Luxembourg, and Riga, we handle transactions in over 40 currencies, delivering levels of personal service normally often provided by large merchant banks to global corporations.
What problem are you trying to solve?
3S Money solves the issues of managing banks transfers in foreign markets. Sending and receiving payments in other countries can be an extremely time-consuming and expensive process, paired with exorbitant exchange rates and transactional fees, and constant delays and blockages. A lot of banks are simply unwilling to deal with small and medium-sized international businesses.
The only solution is to set up a local account in order to receive payments locally and pay out in the local currency. However, this is not always a solution for non-residents, as most local banks are typically unlikely to open bank accounts for foreign nationals. This is where 3S Money is on hand to help.
With 3S Money’s local IBANs, it’s easy for companies to execute all of their international trading needs. Businesses can get all benefits they would have from opening an account in a local bank in the country they wish to trade, with much less hassle. Plus, our dedicated Client Managers have expert knowledge of cross-border trade and are always on hand to oversee transactions and ensure there are no delays.
Are there any recent successes you’d like to highlight?
Despite the covid crisis, during the last 12 months, we have grown our revenue over 400 per cent, increased our headcount by 160 per cent last year to now be a team of 80, and continued to service our mid-market clients by facilitating the fast and efficient movement of money internationally. Focusing on improving the core product, we created an eligibility checker for our Smart Compliance journey, and have started issuing local IBANs in four more European countries.
What challenges have you faced over the last few years and how have you overcome them?
The main challenge has been transitioning from a start-up to a scale-up. In a small team, everyone is friends (supporting each other all the time, even more so than colleagues). But at some point, it became difficult to maintain this friendship while ensuring there is enough focus on work and growing the business.
When scaling up, each person needs to be accountable for what they do, so we had to introduce a proper process that was suitable and necessary for a growing company. Our chief technology officer once said ‘maybe we should stop hiring, can we stay like this?’ but look at us now. Still happy and still hiring.
What is Payments-as-a-Service?
With the evolution of the global economy, global payments add an additional layer of complexity. For B2B organisations seeking to receive online payments nationally or internationally without access to a payments ecosystem, the task of maintaining regulatory compliance can intimidate management teams and create a monstrous workload. Payments-as-a-Service (PaaS) is the solution.
PaaS is a cloud-based platform that can offer all sorts of payment services and technologies. This allows companies to widen their services to customers using one single channel and enables them to keep up with payment modernisation and customer demand without actually have to invest their own resources. The Payment-as-a-Service market size is expected to grow at a Compound Annual Growth Rate of 16.9 per cent, reaching $25.7billion in 2027. A key factor that will continue to power the payments sector is customers looking out for fast, efficient and modern payment platforms. The adoption of AI and other advanced technologies pushes companies in the industry to go a step further in improving their services to customers.
Increased competitiveness requires companies to put customers first and adopting a PaaS product is an effective way to achieve that. PaaS is expected to be the next big hit not only in the payments industry but in the financial services industry overall. PaaS also allows companies to manage higher volumes of transactions much more quickly and inexpensively than their traditional IT system ever could. It also gives them the freedom and flexibility to expand to new markets, reach different customer bases and continue to meet their customers’ needs on time.
What are the current trends in the payments industry?
Payments in one-click is the key trend. It’s been around for some time and has been patented by Amazon who responded quickly to growing customer demands by offering a frictionless payment solution where consumers can check out with a single click. The big advantage of one-click payments is that it eliminates the issue of shopping cart abandonment. It is also an interesting payment method to simplify recurring payments for consumers while getting their permission to withdraw funds directly from their account.
However, the emphasis on providing fast and seamless payment experiences puts increasing pressure on businesses to ensure a secure environment and minimise fraud. As online payment solution technologies are evolving, robust fraud protection solutions must follow. Businesses are now further exploring the possibilities of advanced AI and machine learning technologies to quickly identify suspicious patterns. Combined with advanced human intelligence to perform experienced risk assessments, retailers are striving to offer a fast and smooth payment solution while guaranteeing a secured payment environment.
What do you predict will be the future for payments?
The future of payments is traceability. Many payments get lost and stolen, and lots of people struggle to get their money back when this happens. More than 300,000 people lost £854million to scams in the two years to the end of June 2021, but only 42 per cent of the total was refunded to customers. But while technology and electronic communications can make it easier for fraudsters to steal and hide money, they can also provide the key to recovering assets and bringing the perpetrators to justice.
Clearly more needs to be done to trace these lost payments and increase that return rate. This is a key thing we can learn from cryptocurrencies – knowing where our money goes and always staying in control.
In the payments business space in particular, one of the key problems we are dealing with is identity, theft, fraud, and synthetic identities. Going forward, we need to attack those problems and deal with them. Once we do, the cost of payments will fall significantly since most of the cost is to do with identity, not to do with actually running payments rails. If you look at current discussions around open banking, the solutions around reputation credentials and figures are at the forefront. I think we’re heading in the right direction there.