PriyaPatelAccording to a report from payments provider Neo, 78% of SMEs rely on incumbent banks for their cross-border transactions but are dissatisfied with the service they receive. They identified unfair pricing and slow payment processing as key pain points. Similarly, PayUK found that only 15% of SMEs did not experience any problems arranging cross-border payments. ClearBank’s senior client director, Charlene Lemard-Maxam, agrees that there are serious problems in the cross-border space. Problems include difficulties in opening bank accounts, slow transaction speeds, and issues with data truncation and loss.
However, Lemard-Maxam sees hope for improvement, pointing to the New Payment Architecture in the UK and the rise of instant payment services like FedNow in the US. She predicts that more focus on local payments and adoption of instant payments globally will ultimately benefit the cross-border payment space, making transactions faster and smoother.
ClearBank, which provides regulated banking infrastructure and real-time clearing access for fintechs, challenger banks, and credit unions, aims to address these pain points. It holds deposits on a 1:1 basis at the Bank of England, giving it established status in the UK. ClearBank is expanding into Europe and the US and is seeking a banking license from the Dutch central bank. However, outside of the UK, the ClearBank business model requires adjustments since institutions must offer lending services to obtain a full banking license.
Despite this, ClearBank is exploring the use of digital assets and digital currencies. Lemard-Maxam sees potential for interoperability between legacy systems and new technologies, with an amalgamation of old and new approaches in the future. ClearBank aims to be at the forefront of innovation in the digital asset space and hopes to find the right partners to create solutions that benefit users across the payment channel.
