Consumer demands for instant, convenient cross-border payments are rising as more activities and jobs ignore national borders — but these benefits don't help if they don't extend to the user's social circle.
"More of us are living international lifestyles, which means that we're becoming increasingly globally minded," said Nigel Green, founder and CEO of deVere Group, which offers the deVere Vault, a multicurrency app that launched last year from the Dubai-based company.
There are a couple of areas where fintech action is heavy, such as providing instant access to local currencies or executing cross-border payments online. This is where Ripple's blockchain has found a major source of business, as it lines up banks and transfer networks like MoneyGram and Western Union to create an ecosystem for consumer-friendly international payments.
deVere is also tackling this trend with Vault, a Global Processing Services-powered app and prepaid Mastercard that allows consumers to spend, receive and store funds in up to 27 currencies. In less than a year, the Vault has picked up 40,000 users, and use cases are emerging that warranted a tweak, according to Green.
The company added "Companion Accounts," or up to three additional accounts within the single Vault app. This is designed to remove fees and enable shopping and expense management for relatives and companions that are in other countries, such as students or spouses.
Like the "friends and family" concept on a phone line, Vault companion accounts remove the need to transfer funds within a small group. In this case, the funds in the companion accounts are managed directly. Companions can't load funds directly, but they can receive funds from the primary cardholder. The companion can use the card at any ATM or point of sale location where Mastercard is accepted.
Multicurrency prepaid cards are a great way to avoid bank charges associated with international transactions, said Zil Bareisis, a senior analyst at Celent, noting they'll likely remain prepaid cards over debit. "I don't really see debit cards going multicurrency, unless the underlying account changes," he said.
deVere's companion accounts are geared mostly for younger family members, with students being a primary use case. Account holders have total control over funding and the profile and passcodes. There are two options, one for minors and another for people over 18 with varying degrees of control given to the main account holder.
"Being in possession of a companion card means they don't need to carry excessive amounts of cash while on their own or traveling abroad, and if the card is lost or stolen they can simply freeze it via the app," Green said.
This way, deVault's companion accounts can be seen as a cross between several payment technology plays: The parentally controlled youth payment apps such as Spriggy; the move toward local processing for e-commerce purchases to avoid currency fees; international education payment services such as Flywire; and remittance plays such as PayPal's Zoom. Chinese payment companies such as Alipay and WeChat are also cutting deals with merchants and processors to support tourists and other global travelers.
The use cases vary, but in each instance the company is looking to reduce fees such as currency conversions or correspondent banking costs.
"Take mobile banking for instance," Green said. "Banking customers all over the world now expect the speed, convenience, innovation and accessibility of mobile banking apps. The days of waiting for the bank to open and wasting time in long queues to carry out routine banking activities are fast dwindling."