Battling a sea of technology companies and major incumbents like Western Union and Travelex for a share of the international payments and currency exchange pie may seem like an uphill climb for a smaller company with less of a track record.
But London-based World First believes its model of enabling mostly smaller private clients and corporations to use e-commerce and white label payment services to expand globally carves out a distinct niche. It also believes treating banks as collaborators instead of targets will be key to its success.
World First might be considered a disruptor to the financial services sector, particularly since it provides the international money transfers and other white-label services for Virgin Money, considered a "challenger bank" in the U.K. for the past few years because of its reliance on online operations and getting away from traditional bank settings.
"But we help many banks and credit unions by providing foreign exchange and global payments to their customers," said Seth Harvey, an Austin, Texas-based global head of partnerships at World First. "We are going to have some future launches with banks as well. For small banks, we relieve some of their pain points and offer a compelling solution under their bank brand."
World First works with bank partners to utilize Swift coding, Automated Clearing House rails or faster payments systems "on the back end of our business," Harvey said.
"We always have our eyes open on new, emerging rails like blockchains and bitcoin, but those are not super useful yet," Harvey added. "They may be interesting in the future for cross-border payments, so they are worth keeping an eye on it."
Since being recognized in the U.K. in 2009 as an authorized payment institution, World First has concentrated on providing payments solutions for e-commerce merchants; helping corporations pay invoices, navigate foreign exchange and understand the various risks in international payments; and providing its Private Client service to individuals needing to make large money transfers globally, either through an inheritance, paying foreign tuitions or making real estate payments in foreign countries.
"A lot of our technology is proprietary, so we build the payments and compliance and consumer-facing infrastructure," Harvey said.
A few years ago, World First wasn't considered a top e-commerce provider, with PayPal, Alibaba, Visa's CyberSource, American Express' FX International Payments, or MasterCard's Payment Gateway dominating that space.
It still doesn't have that kind of billing, but the company has clearly evolved and added presence through U.S. and Hong Kong offices, as well as it white-label solutions for banks, said Nancy Atkinson, wholesale banking expert and senior analyst with Aite Group.
World First targets small enterprises that need greater support for international payments, foreign exchange and risk management, Atkinson said.
"World First and other similar providers offer consulting and training services and one-on-one contact with experts who understand their client's business and needs," Atkinson said. In that regard, World First can provide personalized service in foreign trade; it can hold funds in a specific currency for a period of time; and confirm when a transaction is completed as expected, Atkinson added.
While World First can help banks navigate international waters, it is not concentrating solely on a bank-to-bank cross-border payments network, such as Ripple, another London-based payments provider. Nor is it positioning itself as a company seeking high-volume cross border payments as its niche.
As such, it is not losing sight of how its still-developing mobile app and e-commerce services help merchants.
"People who call us have ambitions to do more globally," Harvey said. "A pottery seller in Chicago may want to sell more in the U.K., Canada, Australia or China, and we can add quite a bit of value on the foreign exchange and payments side, as well as getting that merchant on sites in those countries."
Part of that process includes World First helping the client manage taxes in international markets, manage inventory and set proper pricing. "If it's new markets and new partners internationally, that's an area we can help with," Harvey added.
World First is in talks with some significant retailers in hopes of providing future global expansion services, Harvey said.
It all puts World First in a unique slot in the payments ecosystem because of its services for corporations, private clients and even some banks.
"World First isn't a big competitor or much of a disruptor to banks," Aite's Atkinson said. "Banks' share of the global foreign exchange market is approximately 90%, leaving 10% for other providers to share. But the bottomline is that some banks will partner with World First."